Benchmark

Archives

The Benefits of Choice in Formal M&A Process: Partnership Essentials

After an M&A deal has been concluded, it is unusual for the seller to depart a business immediately. Whether it is a short-term work out or a longer-term growth plan, invariably there will be is a period in which the buyer and seller will operate in partnership.

In all partnerships, be they personal or professional, the ability to achieve the outcomes and aspirations sought relies to some degree upon the compatibility of the individuals. Almost all studies on the essential components and attributes of successful partnerships, unsurprisingly, conclude that the dynamics of a partnership are determined by the same criteria as any relationship, namely, the personalities involved.

The reason for failed M&A transactions has been studied extensively by academics and professionals alike, but these studies contain little to no data comparing the success and failure rates of transactions concluded with the aid of a formal competitive M&A process and those without. However, common to almost all studies of failed M&A transactions, and often deep into the reports, are cursory references to cultural integrations, yet these are rarely addressed or understood during negotiations.

To truly understand whether the fundamentals for an effective and successful partnership exist in a new relationship is not simple, but it is an exercise that can be explored in the context of a process that exposes the business owner—the seller—to choice. It is a common misconception that the M&A processes only generate choices through the creation of price competition.

READ MORE >>

I Need Capital to Grow My Business, Where do I Start?

It takes capital to start a business and it takes capital to grow a business. However, when you have exhausted your personal reserves, what are your options? There are a handful of ways additional capital can be gained to continue the growth of your business. Simply put, there are four categories that most types of capital fall into when you’re looking to grow your business: your own revenue, debt, public equity, and private equity options.

Your Own Revenue

Most start-ups begin from your own pocket. This might be a good way to get the ball rolling, and you can hit up friends and family for additional funds along the way as well. As long as your business grows at a steady pace, this might even be a reasonable ongoing source of capital as it encourages organic growth. This capital pool allows you to stay in control and if the business changes, you can make adjustments accordingly.

Using your own revenue to grow the business allows you to remain in control, but it may take longer to reach your growth objectives. Opportunities could potentially be lost because there is not enough available capital to take on new projects. Additionally, if you spend all your time and money concentrating on growth, you may never get to see the full value of your work because all your profits are going back into the business.

Debt

All businesses have some sort of debt whether from a bank loan, credit card loan, or mortgage for a business property. You just need to decide how you plan to use debt to help your business grow. Using debt allows you to grow your business without giving away any of your ownership in the business. Taking on debt for new equipment, for example, will increase your company productivity and allow you to pay down the loan quicker.

READ MORE >>
1

Subscribe to Email Updates

Recent Posts

Follow Us on Twitter