When it comes to mergers and acquisitions (M&A), both buyers and sellers have their work cut out for them. Although 325,000 mergers and acquisitions valued at more than $34.9 trillion have taken place over the last 40 years, these deals don’t come without risk. In fact, 60 percent of 2500 M&A deals made between 1993 and 2010 resulted in a destruction of shareholder value. And nobody wants that.
Importance of Business Acumen
That means all parties should be informed and aware of common mistakes made in M&A negotiations. Buyers, for example, tend to get caught up in the excitement of chasing a deal instead of focusing on the financial, legal, and technological value of the company they’re trying to acquire. Sellers, on the other hand may only look at the money they’re being offered, paying little or no attention to how their startup is likely to fit into the bigger company’s style. For additional pitfalls both buyers and sellers should avoid in M&A deals, take a look at the following infographic.
About the author
Teo Spengler earned a J.D. from U.C. Berkeley’s Boalt Hall (now University of California, Berkeley, School of Law). As an assistant attorney general in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff’s personal injury practice in San Francisco. She also holds both a M.A. and a M.F.A. in creative writing. Her work has appeared in numerous online publications including USA Today, Legal Zoom, Legal Beagle, Pearson, and numerous attorney websites. Spengler splits her time between San Francisco and France’s Basque Country.
A business owner and customer sit down together for a meal and moan about their bills, each from their own perspective. They agree about the joys of receiving their monthly bills whether by snail mail, or email, if you’ve gone the paperless route. So many bills! Telephone, mobile phone, vehicle, satellite dish, internet, mortgage, insurance, etc., and the list goes on! Well, for those who can afford these ‘privileges’, will see these bills every month. What if a change occurred in delivery of our bills?
Business Plans and Tools
A business development and management course I had taken taught putting together a business plan. One of the steps requires annual cash flow projections showing a slight increase, of prices each year and keeping up with potential of rising inflation and/or our competitors. This helps to see, and/or, realize the potential success, of the business project at hand aka the financial forecasting exercise.
Research is done by marketing firms and businesses to check out ‘trends‘ and/or discover new customer insights. These reports are tools that help businesses adjust and improve their own marketing efforts, to their existing, and/or, for new customers yet still make a profit, to continue operations of their business. It is a great practice and tool, for all business owners.
Customers Collective Buying Power
Now, at the other end, we have our customers. As a customer myself of different services, I have come to realize that many businesses earn over the top profits, with the amounts of monies paid each month. Our governments have control over infrastructure and delivery of some of these services, such as Hydro and we know that our electricity bills, are skyrocketing, least in Canada. This adds a financial burden to many struggling to stay afloat of homelessness, unemployment, etc., since wages aren’t keeping up. What is up with that? Oh! Got to love this quote.
J.O.B. Just Over Broke
A business needs customers to operate. The monies from every customer especially when gathered together, and drawing upon a customers ‘collective‘ buying power, add up. We are the ‘target market‘. Prices continue rising and we continue paying even though we’re at the edge of broke. I must add another quote that’s awesome, bear with me please. 🙂
‘I’m not Greedy if I ask for only $1 from the whole population‘
Examining that quote about not being greedy, can you imagine how much money can be gathered, from the whole population? For Canada, there’s near 34 MILLION people. Now, reassemble that number with the amount of one of your bills but lesser number of people, say, 12,500. Business planning requires answering the question about ‘market share‘ meaning, how many customers needed, to make a profit? Do you see the amount of monies a business can collect from their ‘target market‘?
Oh! the Businesses will cry Foul!
Can you hear the business owner protesting? Alright, yes, the business owner has bills and financial responsibilities of his own. S/he will have to pay off equipment costs, business loan debts, staff, business licenses, rent, memberships, equipment maintenance and/or replacement, insurance of one kind or other, etc., and it adds up. One beauty about business plans, is they can pinpoint, to almost the nearest dollar, what exactly a business will be required to spend aka ‘expenditures‘. They can’t foresee all future obstacles, that may cause disruptions, of their services and/or products but it’s recommended, to be prepared.
Fair, Unfair and Outright Greed
The prices of many of our gadgets, utilities, services and needs will vary. As customers, we constantly seek out the lower price, to free up and further our own spending power. Some people say the government enrich themselves, off the backs of the People, paying themselves with the Public tax monies, using Public tax monies to pay for ‘government business needs‘ (airplanes, chauffeurs, hotels, meals,rent) always wanting more, raising taxes, creating claw backs, Greed just seems to runs rampant in government office these days, yeah?
Customers don’t just stop at governments either. They will look at business owners and discuss the outrageous price hikes of various products and conclude, greed is the driving factor. The struggle to keep food on the table, heat, water, daycare, telephone, satellite dish, internet, the costs keep rising. Do business owners genuinely appreciate their customers these days?
The many businesses that exist, looking to improve their operations and/or, to attract more customers, can just look at their own ‘personal emotions‘ about bills, to find an opportunity, to change their marketing efforts. We can create our own ‘mover and shaker‘ experiences for customers.
A few simple ‘incentives‘ a business owner could offer customers and build ‘popularity‘ could be, the following
offer a one year FREE service for sending in referrals (but no conditions, such as must be new paying customer, that’s asking for unrealistic guarantee )
offer one month HALF price or FREE month (i.e., Christmas month)
offer a ‘once-a-month deduct your bill‘ customer day
offer once a year billing
The point is to realize, customers are struggling to make ends meet too. Rather than viewing them as a ‘money tree‘ and ripe, for harvesting them for every dollar. Take a step back and see, how can a business make their life easier, and, grow loyal customers?
I hope you found this article informative and gained some new insight. Please feel free to share with others! Use the ‘Ask a Question’ form to make a request on a topic of your own interest. I hope you visit again for more informative articles coming soon.
Article(C)2009 – current AIC| An Informal Cornr, all rights reserved. Ginsense writes articles on business skills and development, health, science, technology and society, and enjoys advocating for social justice, security, and, a better world for all of us. She works as a VEA to help businesses operate more effectively.
The cost of living in Canada, has risen to points of being seemingly near unattainable, to enjoy a quality life. They struggle to put food on the table, pay rent, car payments, bus fare, daycare, etc. Costs for supporting a family may be more! due to meeting needs for other members, besides just ourselves. Stress sets in and that daily nagging question, how can I support my family?
Today, many families have dual incomes where both parents work, and share financial responsibilities of managing the bills. Some families will have the ‘main‘ breadwinner role, and brings home a higher pay, and their spouse may work only part-time hours, to bring extra monies, to help reduce the financial stress, gain possible savings and still provide, a parental presence for their children.
Where to begin?
A business will flourish, when it meets a ‘need‘. We look around and figure, all the needs are being met, shoe store, clothing store, grocery store, etc., and we find that we are unable to compete with them, but, not all services are met.
A few steps to begin;
Examine your own skills, write them down.
Examine your spouses skills, write them down.
What do you enjoy doing most? Write them down.
What does your spouse enjoy most? Write them down.
Write down a list of all your bills, add them all up for the monthly total.
How much extra money would help make life easier?
Can you sell one of your skills, as a service, to others?
Success, in selling your services can be found, by learning to ‘market‘, to a larger group of people, interested in your service skills, and who will become your clients. This can be done with a good ‘promotion‘ campaign, of your services whether on simple bulletin boards, online at Craigslist, using classified ads, or simple but attractive flyers. Friends can also help with simply passing the word along about your services.
Let’s examine a sample ad and outcome;’
A client looking for a light housekeeper may be thrilled and call immediately but require your services only twice a week and expect you done within 2 hours, every Tuesday and Thursday. This adds up to $60.00 per day, ($30.00 per hour x2 = $60.00). Let’s say, another client also calls, and again, may require the same schedule of 2 hours, but 1 hour on Mondays and Wednesdays. 1 client ($60.00 x 2 days) =$120.00, a week or with 2 (clients), same math,you are earning an extra $240.00 per week, x 4 weeks (one month) = $960.00.
Providing this type of ‘service’ can also be set up, to suit your own schedule. Let’s examine the following sample ‘day planner’ set for working mornings only, 4 days a week, with 4 clients ;
The numbers will vary when holidays are involved but if required by clients, you can ask for a higher price and it’s very important, to know your local labour laws. Do not under sell your services or self worth.
Success can be found in selling ONE service and finding a few ‘clients’ who want your service. A major concern with clients will be, TRUST. Nobody wants theft or destruction of their goods and/or property. Police will be called and charges laid. It may be important to consider working with a trusted partner to protect your own innocence, in the event the client files ‘false’ allegations, so not to pay. It does happen. Always good to stay safe.
One sample job has been used but there are many other ‘service‘ jobs that you can offer depending upon your skills. Watch the slide show! You may just want to work part time at the corner store , and still offer your own skills, as another part-time job too.
The scheduling will be in your hands, how much you want to earn, how many days you want to work, how many clients will you need. It’s important to keep to your schedule or lose your clients, and ‘business’ reputation. Do a little research ahead of time about ‘business’ development and management skills.
I hope you found this article informative. Please feel free to leave your comments! or share with your Friends who may find this article helpful. Use the ‘Ask a Question’ form and request a topic of your own interest for an upcoming Post.
Article(C)2009 – current AIC| An Informal Cornr, all rights reserved. Ginsense writes articles on business skills, development, health, science, technology and society and enjoys advocating for independence, security and a better world for all of us. She is also a VEA available for Hire 🙂