Best Practices for a Smooth Company Merger
Whether you are going through a merger, a buyout, or another type of joint venture, these can all be overwhelming and challenging. Read up on our experience here, maybe we can share a few pointers and relieve some fears or misgivings you may have about the process.
Written by Rebecca Roberts
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What to do (and what not to do!) when going through a merger
Going through a merger? This doesn’t have to be you! Mergers, buyouts, and other joint ventures can be overwhelming and have a lot of moving parts, but it can be done! If Amazon can buy Whole Foods, a smaller merger is definitely doable. That being said, if you are entering the business world, do not get comfortable! Things change all the time and if you are successful, they should change all the time. Bolt Goodly has gone through its fair share of shifts and changes in the past two years. What began as a loose partnership between two, turned into a legal business partnership between two different people, and now has become a merger of multiple companies.
This process of merging has taken us an entire year and we documented all the steps we took so we could share it with others going through the same thing. Here are some best practices we noticed while going on this journey:
Number One – Timing is Everything
Timing is key and unfortunately, this cannot always be planned. Fortunately for us, everything kind of fell into place at the right time. Sometimes the timing might look like this: your business is doing so well that you can’t take on any more growth until someone purchases you, merges with you, etc. Or it might look like this: you are struggling to grow because you’ve hit some kind of ceiling or barrier that a merger or buyout might help you with.
For us, it was the latter. Two of our now co-founders were finding themselves stuck in their lack of experience in sales and marketing. Thank goodness and old business associate and friend happened to be experienced in sales and marketing but was challenged in the areas of operations and fulfillment where the other two co-founders were strong!
Jumping on the opportunity to merge and create something together is kind of like having children – you’re never really ready, sometimes you just have to take the leap of faith – and that’s exactly what we did. We chalked it up to fate that we found each other at the right moment right when we had both hit a wall and we knew that this was the time to see if a merger would be beneficial for all parties involved.
Number Two – Start with a Small Team
Start small if you can. One of the first things we learned is that we tried to merge too many different pieces all at once and it immediately made for too many cooks in the kitchen. There were four or five different companies looking to merge and create one big media company and while every company had advantages and benefits that would have worked for this venture, trying to put it all together at once would have just imploded the whole thing.
Organically through this process, we ended up with the three co-founders we have now merged our respective businesses together to create what is now Bolt Goodly Inc. Starting with a smaller team also ensured that we could take our time to make sure we were a fit and that we honed all of our processes without getting too many hands in the cookie batter and getting lost along the way.
Number Three – Take Your Time
When we made the decision to join forces, we began a sort of dating period. We did not jump into the formation of a new company or a merger until we were all comfortable that this would work for everybody. During this time we looked at ways that we could continue to work on our own individual clients while starting to work on some new clients together, as opposed to merging everything all at once.
This dating period, which lasted for about 6 months, allowed us to continue a steady flow of income on each side as we continued to work with currents clients, which was beneficial to personal and business cash flow. It can take a lot of money to start a new venture, so we were able to save up a little more during our courtship y not rushing into everything. We also worked on processes to work on one or two new clients together. By moving slowly and taking our time we uncovered a lot of things that did not work in those first six months and we were able to quickly uncover all the things that did work.
Number Four – Culture is More Important than Skill Set
One thing we found out right away is that culture was going to be a lot more important to us than skill set. We looked to some of the greats such as Google, Zappos, Virgin, and other brands have created a culture of “employees are people first” and give them the autonomy to work with an entrepreneurial spirit of sorts.
We are aware that in the technology world we will never know it all. There is something new coming out every day, something changing, something updating, a new algorithm – you name it. So we knew that our skill-set would always be changing and growing with this vertical. This made it a lot easier for us to focus on culture first. Our courting period allowed the three of us to create a culture that we really enjoy as well as set the groundwork for everyone we might work with in the future, be it an employee, partner, or client.
Number Five – Play on Each Other’s Strengths
To add to number four, where we realized our skill-set will always be changing, another thing we realized is that we needed to play on each other’s strengths from the start. Each owner does not need to be an expert in all areas of the business. We’ve found that we work best when put in areas of strength, and of joy. We want to be the most productive, and with the happiest employees! We also make it a point to hire people who are better at certain things than we are to expand the team portfolio.
One of our partners was very experienced in sales and marketing but then found himself a solo fulfillment team, always a little bit behind and unorganized. Another one of our partners is very skilled and experienced in business management organization with an MBA degree, which balanced this opportunity. Our third co-founder has a finance degree and is very experienced in business strategy and also has close to 30 years of actual fulfillment experience in all things technical, but less experience in sales.
The balance of all the founders being experts in different areas of business has helped us grow together, hold each other accountable, teach each other new things, and really thrive since we’re not all wearing too many hats. And even more so we’re all wearing the right hats and the hats we want to be wearing.
Number Six – Get All of Your Paperwork Right the First Time
Okay now comes the boring stuff! You do have to actually form a corporation once you are done with your dating period, your culture and boosting each other up with your talents and all the fun stuff. We did go through a process with lawyers and mentors to ensure that we were creating the right kind of business entity. We also covered exit strategy, shareholders earnings schedule, insurance, accounting, finances, operations and everything else you can think of.
All of the paperwork and busy work part of business might seem tedious, boring, and a lot to take in, but it is vital to the longevity of your venture to cover all of your bases. You might be able to outsource some of it as well. Depending on what you’re good at, you may want to keep some of it in-house. For us, it was important to develop our own operations and project management system since the majority of our work is fulfilled in-house. We also kept finances in-house but chose to outsource daily bookkeeping, insurance, and all of our legal requirements.
All of this busy work guarantees us a financially-sound business, smooth operations, and a long-lasting legacy which is what we are trying to create.
Are you an entrepreneur after all?
The entrepreneur life is not for everyone! if it were easy everyone would be doing it. This merger has had its ups and downs but it has all been worth it to say that we have created something from the ground up that has strong bones and will last.
If you want to create something like we’ve created it bolt goodly we do offer business consulting services please contact us let’s talk about your dreams and get you moving.