You started out with a small business and it has continued to grow over the years. You’re now in a position where you’re looking to expand further. There are many options to choose from, but a merger has been at the top of your list for some time.
Before committing to any decision, it’s important to take a balanced approach to your research and explore the pros and cons of your potential choice. Outlined below are some of the key advantages and potential disadvantages of business mergers.
Access to larger shares of the market
A merger essentially involves multiple companies pooling their resources. Usually, a larger firm takes over smaller businesses. One potential result of this is that the new and expanded organization gains access to a larger share of the market, which is good for profitability. Additionally, the now larger company will have access to more diverse resources. This could make research and development much easier, as your company will have access to a wider range of equipment and expertise.
You might save a struggling company
The smaller company you are merging with has many beneficial attributes, but they have lacked a little in terms of efficiency. This means that rather than turning a profit, they’ve been running at a loss for some time and are in some financial trouble. You are certain that with what your corporation brings to the table, and a few minor adjustments, this company can become a profitable part of your business overall. You could save a lot of jobs while making money at the same time.
Difficult decisions might need to be made
Of course, nothing in business is plain sailing and you may have some difficult decisions to make after a merger. You might not have the option to keep all of the staff from the original company. Implementing layoffs is never easy, but it is sometimes the only viable option for running an efficient business.
As a business owner, you’re used to being assertive and making big decisions. Having legal guidance behind you can help make these choices a little easier.