If the opportunity arises to merge your company, there are a lot of essential things to consider. From the opportunities to expand and grow that merging two separate companies offers, to the financial implications and the practical complications which may arise. There are a few major things to consider before deciding that merging your company is the best option for you. Here’s what you need to consider:
The financial pros to merging your business are what makes merging with another company such a desirable venture, especially for small businesses. The potential for growth is much bigger when merging with another company, but it can also work the other way too. If one company gets into debt or profits start to fall it’s likely to severely affect the future of your business too.
When merging with another company considering the extent of the relationship you’re going to have with them is important. Some merger companies completely leave their old business identity behind to form a completely new company as did mobile network providers T-Mobile and Orange when they formed EE. Other companies keep their own brand names when merging, for example Lloyds and TSB formed Lloyds TSB.
Two companies merging together has huge practical implications. From concerns about the number of members of staff, to conflicting job roles and thinking about business premises. A perk of merging means that both sides can sell off some of their branches in order to save money and make a profit on the new branches as did high-street travel agent Thomas Cook when merging with The Co-Operative Travel.
The legal aspects of merging your company is where it can get complicated. By using the services of a company like Withers you’ll be able to smooth over any legal issues which may arise when it comes to working out asset purchase and share purchase values. Often if employees already have shares in their company, they can be concerned about what’s going to happen to them as a result of the merger, this is where having a legal company involved in the process can really help, in order to smooth everything over.
Merging your company is a huge decision and one that definitely shouldn’t be taken lightly. By considering all 4 of these points before making a decision you’ll be able to decide whether merging is the right step forward for your business.