What Are the Top 5 Things to Know if You’re Buying or Selling a Business?

Buying, selling and merging businesses can be a bit like dating. It’s important to know all you can about the other party so you don’t end up in a bad marriage. There is a lot that can go wrong when buying or selling a business, and these are the five more important things you should know before you start the process.

“Moving employees from one company to another with great transparency keeps many HR leaders up at night. Enterprise, Middle market and entrepreneurs are all subject to the possibility of being sold or bought. Employees want to know if they will have a job, who will be their boss, how does the career pathing change and will their benefits stay the same. It takes time to answer these questions.  Work all of your options by being patient and also exploring other opportunities. Trust the opportunity that being patient my pay off 10-fold!” says Sharon Tsao, CMO, Contemporary Staffing Solutions.

Do You Have A Clear Business Case?

Buying and selling businesses takes time, money and resources. Before you enter into a merger or a sale, make sure that both entities have a clear business case for taking the plunge. Each business should understand why they are doing the deal and what they hope to achieve.

Do You Have The Resources To Conduct Due Diligence?

There is no excuse for taking shortcuts when it comes to pre-deal due diligence. You have to be sure that everyone is presenting an honest and clear case about the state of their organization. Many times, buyers overlook red flags to close a deal. For example, if you’re after a company’s relationships and major contracts, odds are you’ll have to retain many employees once the deal is done. That sounds simple enough, but many of those key players could jump ship if the deal doesn’t go smoothly or you could overlook the costs associated with keeping those key players on board.

Do Your Company Cultures Mesh?

If your company cultures are not aligned, it sets the stage for trouble in the future. Talented employees work for companies where they feel that alignment, and the culture shock of new ownership can wreak havoc on productivity, output and employee retention.

Sellers who care about their employees should pay close attention to culture. You want your team to continue to feel valued and respected. Make sure that employees you want to retain from both companies will be comfortable with the new culture.

Do You Have Expert Attorneys?

Each party should have expert M&A attorneys on their team to ensure that contracts are air-tight and that interests are protected on both sides. Your regular team could be great at business law, but if they aren’t experts in buying and selling companies, they may not be the best choice to help you hammer out the deal. The quality of your sale and the future of the business depends greatly on the quality of your legal team.

Are You Prepared To Lose Staff?

When you buy or sell a business, you staff reorganization is inevitable. Some jobs will be cut. Some jobs will be added. Some employees simply resist change and either quit or must be let go. Bringing in talented new blood is often necessary and can even help the process run more smoothly. If you are looking for talent for your business, partner with Contemporary Staffing Solutions. Our team are nationally-recognized experts in staffing and recruiting. Contact us today to learn how CSS can help you achieve your goals.

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