It is difficult for small companies to compete with large companies that have long occupied a niche in their industry. A successful start in business requires impressive capital and resources that not all entrepreneurs have. In such situations, mergers and acquisitions of companies can be an excellent solution. These are types of reorganization of commercial organizations to connect two or more business entities and merge their capitals. It is time to ask for support from mergers and acquisitions advisory companies to guide you.
Benefits of M&A Services for SMEs
The main goal of mergers and acquisitions for SMEs is to increase profits. This is a complementary cooperation between two or more companies, predicted to achieve a better outcome and get more profit. In addition, there are other motives:
- SMEs can obtain additional discounts from suppliers due to an increase in the volume of purchases.
- Joint activities in new developments require pooling financial and intellectual resources.
- Access to new resources and opportunities. Improving performance by having two or more companies have complementary resources.
- Enhancing the company’s image in connection with the growth of its scale and increasing the level of incentives for managers.
Risks and Challenges of M&A for SMEs
Negative factors from mergers and acquisitions are:
- One company can impose its strategy, which affects the efficiency of another.
- Difficulty in combining different corporate cultures.
- Two companies may have different strategies and ideologies: one is conservative, and the other is innovative.
In addition, the disadvantages of M&A transactions can be:
- the need for financial investments;
- problems with integration;
- a large share of the risk of incorrect assessment of the company;
- possible issues with the personnel of the acquired organization.
How to Find and Select an M&A Consultant for SMEs
Why does a company need M&A advisory help before reorganization? It’s for:
Conducting analytical studies on potential objects of mergers and acquisitions, forecasting the development prospects of the companies merged as a result of the transaction
Business valuation. Possession of modern techniques and methods for assessing the value of a business to solve the problems of managing a company after a merger and acquisition transaction
Analysis and assessment of financial risks. Calculation of the consequences for the company – the initiator of the transaction and other participants in the merger and acquisition transaction
Development of a strategy and tactics for managing financial risks and company value in mergers and acquisitions in modern conditions
Preparation of regulatory and methodological documents to implement prepared projects for M&A transactions.
How to Select a Good Consultant
While preparing and conducting a transaction, many diverse issues may arise, requiring detailed investigations and specialized knowledge. The best solution is to consult competent mergers and acquisitions advisory experts like Waveup. How to select a good company? To avoid making a mistake, you should be guided by several criteria:
- Information about the firm or consultant: experience in the consulting services market, time of existence, registration data, website.
- Online and media reviews, reputation. The staff of qualified specialists, including experts of narrow specialization.
- Terms of service provision.
- Cases or portfolio, the number of completed projects.
- Clients of the company, especially serious businessmen.
- Cost of services – choosing a company with an average cost of services is better. Too low prices should alert you.
Thanks to the M&A advisory company, the entrepreneur and executives can receive a full-scale consultation at any stage of the M&A process. Large consulting firms have dozens of narrow specialists with vast experience who can help solve various problems at each stage.