Unfamiliarity with M&A can lead to a lot of misconceptions about the process. Believing in these myths can lead business owners to make decisions based on misinformation and fear.
Understanding the facts of M&A can help you navigate acquisition discussions with confidence. Read below for 5 common acquisition myths and facts.
Myth #1: I should wait for a buyer to contact me.
Fact: It’s important to proactively reach out to potential acquirers.
Selling your company is a big decision, and you want to make sure you explore your options so that you choose the best acquirer for you. The right buyer for you may not even know you exist, so you need to seek them out.
Even before you consider selling your business it makes sense to build relationships with organizations that might be possible acquirers of your business one day. Building relationships with acquirers over time can help you understand what they would mean for you, your employees, your customers and your brand.
Myth #2: My Company will lose its brand identity.
Fact: Your business does not need to radically change post-acquisition.
You’ve worked hard to build a brand that your customers trust. Some acquirers appreciate this and are not interested in stripping away your brand in favor of the corporate brand.
Volaris Group is an acquirer that believes in maintaining brand continuity. We encourage companies to keep their trademarks, slogans, and company culture. In fact, our companies never get rebranded with the Volaris brand post-acquisition.
Myth #3: I’ll lose control over the business.
Fact: Not all acquirers want to squeeze you out of your business.
Some acquirers, like Volaris Group, want to accelerate growth while keeping competent leaders in place. When we acquire a company, we encourage owners to consider staying on in a leadership role.
Volaris business leaders have the autonomy to continue running their businesses, and gain access to resources to help improve and grow the business. We provide our business leaders with benchmarks that give insight into what the company currently does well and where they could do better. We also help our business leaders learn how to acquire their own businesses.
Myth #4: My Company is too small; nobody will be interested.
Fact: In recent years, many acquirers began taking interest in smaller deals.
Only a few years ago, few acquirers bought companies with less than $5 Million in revenue. Now, smaller deals are much more common.
Still think you’re too small? You don’t know if you don’t try; speak with acquirers to see if they’re interested before you assume they’re not. Size is a factor for acquirers, but it’s not all that matters. Building relationships with acquirers can help them understand nuances of your business so that they can assess their interest based on more than just your size.
Myth #5: The buyer will only see the value of my products, not the value of my people.
Fact: Some acquirers believe your people are critically important to the success of your company.
At Volaris Group, we realize that businesses are first and foremost about their people who listen to their customers and then create great products.
Your people know your industry and there’s a lot of value in that knowledge. Because we take a long-term approach to acquisition, when we acquire a company, we put a heavy focus on nurturing its people. Staff at Volaris companies benefit from leadership and skills training, and gain access to more opportunities for promotion.
Do you care about what happens to your staff post-acquisition? In M&A discussions, be sure to ask questions about the acquirer’s long term vision for your company. Ensure you understand how staff may be impacted by the acquisition.
Gain confidence as you move forward with M&A
Re-think your assumptions about what acquirers want and what acquisition would mean for your company. Being mindful of these myths will help you to develop relationships with acquirers and be less fearful as you consider the prospect of selling your company.
Some of the content in this blog post was inspired by Corum Group’s recent webcast on M&A Myths and Misconceptions. Click here to view the recorded webcast.
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