Red flags for a merger

Joining your business with another can help you both achieve new levels of success or simply to remain afloat during a difficult time. When two business entities decide to join together, it can help both business owners make a significant shift.

If you are considering a merger, it is vital to see the entire picture so that you are not surprised shortly after closing your deal.

Here’s what to watch for before you decide to merge your company with another.

Understand why they want a merger

In most cases, a merger can be a step forward for both businesses. However, it is essential to consider that the company you are about to merge with could be struggling more than you know.

You may already be aware that you need to conduct your due diligence before agreeing to the deal, but as you analyze the other company, consider factors such as:

• Pending issues with suppliers
• Credit risks
• Ongoing legal conflicts

When you are aware of the liabilities that could come with your merger, you can go into the deal with your eyes open and a plan to work through potential problems.

Even models need to merge

Part of what draws your customers is the way you do business. Your method for managing your products and your employees could be vastly different from how your new partner manages their organization.

Before you sign on the dotted line, have a plan to merge your business models so that you, your staff and your clients can have a sense of continuity.