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For Sale – We have four print related businesses on the market, and with registered buyers looking to purchase, we’re looking for more. For example we’d like to find a small to mid-sized digital business based in Melbourne. To view the businesses we have on the market, or to enquire about our other services, click here
Tip 5 / 5 Tips to consider when you’re planning to grow by acquisition.

Tip 5 – Plan post purchase integration. Often there is a real high after the business purchase is completed, but experienced buyers will know that that is when the real work begins. Most acquisitions fail (don’t meet objectives of buyers and sellers), not because the price was too high, or because of the way the business was presented, but more because there was no or little transition planning

There is a lot to be done in the first 30, 60 and 6 months post the purchase. Perhaps the one thing that is hardest to integrate is the new staff. Trying to meld two groups of staff together often poses a real challenge. They are used to working their own way. Machinery operators may have worked different hours, may have operated different machines, and don’t understand the quality requirements of the new firm. Sales people are a different breed, and the management teams may be pulling in different directions. The same HR issues relate to integrations of all sizes.

Obviously much planning effort should go into the seamless transition of clients. Anything that can assist is achieving this goal should be considered. New clients are hard to find, and having just purchased the client list as part of the business, a plan needs to be developed to ensure they are retained and nurtured. As much of the clientele are likely to have a personal relationship with members of the previous business, purchasers should consider who calls on them post integration. What is the underlying message you want to send them? How will they be notified? What plan do you have for milking the vendor’s data base and their non active clients? What other services facilities can you offer their customers?

The same is true of course for how you continue to manage your own client base. What new services does the new business bring for you clients? Will there be a change to the way you handle your own clients?

Another area of consideration is the integration of systems, such as HR, invoicing, data base, quoting, estimating, workflow, client files / artwork, on line systems and management information systems. All require careful planning to ensure a smooth integration
If new management are bought into the firm, then it is important that they are part of the planning process, together with your own team. They need to own the plan as much as you do.

Planning the financial impact of a purchase is also vital, as the purchase will obviously have an impact on your working capital requirements. Consider also doing some “what if” financial modelling / cash flow. No one ever planned for a bad deal. Working out some best case / worst case scenarios is important. A good deal of objectivity and realism is required.
Other areas of integration that should be considered include machinery – which ones? What type do you need? How will the integration affect the shifts / hours you work in production? Do you need more power? More storage? New delivery services? What opportunities are there to really build the value of the purchase?

To maximise the return on your purchase there is certainly a lot to consider. And it’s not just about planning of the integration of the new business it’s also about what effect it is going to have on your existing business. There are some great synergies that can occur with a purchase, but the likelihood is that they won’t be maximised by chance. A written integration plan is therefore paramount to ensure the purchase is successful.

 

 Ascent Partners offers business appraisals, and the subsequent development of options as industry consultants.  Contact Richard Rasmussen on 0402 021 101, or visit our web site at www.ascentpartners.com.au