Business mergers date back to the end of the 19th century, but not all mergers are created equal. When two big companies come together, they can reshape industries and even societies by altering the way people access their goods and services.
Immediately following a merger or acquisition, most companies focus on cost synergies. There’s a good reason for this — two recently combined companies usually have redundancies in costs like IT, accounting, and HR that can be rolled together to significantly reduce costs. Often, one company will have strengths where the other has weaknesses, allowing increased efficiencies on both sides.
According to Forbes, 83 percent of mergers fail to add shareholder value. Some reports put the number as high as 90 percent. Mergers and acquisitions aren’t a new phenomenon, and there are plenty of tried-and-true techniques for making sure that they go smoothly, so why are so many of them unsuccessful?
Taxes are complicated. And the more you earn, the more complicated they become. Throw in a lot of recent arguments in Congress and legislative changes on taxes, and it’s understandable to be confused by how the whole thing works.
The decision to terminate an employee isn’t an easy one — especially in a small business. Chances are, you’ve known this person for a while, and you have a fairly tight-knit group. The decision gets even harder if the employee hasn’t broken any rules or laws.
Congratulations — you’ve worked hard, and your business has graduated from start-up to fully fledged small business. It’s time to take the next step and hire some employees. Keep in mind, though, that those first employees are going to be some of your most important. When there’s just half a dozen of you, there’s no room for error or a lack of accountability. And there’s a good chance that you’ll never get into the hundreds of employees — according to the Small Business & Entrepreneurship Council, 89% of American businesses have fewer than 20 workers. You’ll need people that can understand your vision, execute it perfectly, and carry it into the future.
Some business owners think of a business valuation as simply a sticker price for their business — if you’re not trying to sell, why does it matter what your business is worth? But a business valuation can provide valuable insights into competition, asset values, and income values.
Topics: business valuation
Businesses might run on products and services, but they’re run by people. The people you bring on board at your business to execute your vision are at least as important as the quality of your product or the efficiency of your business model — probably more so.
Topics: Human Resources
For business owners and leaders alike, it can be hard to keep from micromanaging. It’s especially difficult if you founded the business yourself — there was a time when you were the only person involved, and it’s hard to relinquish control and decision-making to someone else.
So you want to buy a business — maybe you aren’t a business owner but you’d like to be, or maybe you already own a business and want to use this acquisition to expand your market, acquire talent, or vertically integrate your supply chain.
Topics: buying an existing business