COVID was a once-in-a-lifetime catastrophe, but it shone a bright light on many once-hidden weaknesses across industries. No mater how hard their individual industries were affected by the pandemic, companies with excellent management, an agile strategy, and sound business plan were able to thrive even in the worst of times. Now that the pandemic is winding down, many of these businesses are looking to M&A as a tool for growth. But they can’t blindly rely on M&A to compensate for weaknesses in their business models. It’s simply naive to assume that all integrations will go smoothly, or that all sales will make it to the finish line.

COVID showed businesses the importance of being strategic in everything they do. That includes their approach to M&A. The right M&A advisory team or investment bank is critical to helping businesses prepare for the process. There’s still a lot entrepreneurs can do on their own, though, to ensure the most effective M&A strategy possible. Here are four ways to make M&A work better.

Let Demand Drive the Approach

Selecting the right market is critical to growth, whether a company is selling to someone else or buying to expand. Businesses must choose markets with stable, healthy demand for their products and services. Once a company has narrowed it down to the right market, they focus on identifying partners whose strengths complement their own. Otherwise, they can end up pursuing promising partners without considering the overall state of the market in which they operate.

Set Clear Benchmarks and Measurable Goals

A company’s M&A goals must be clear and specific—not bland descriptors like “more success” or “better customers.” Instead, businesses should set measurable criteria for their M&A goals, then establish clear benchmarks for measuring their progress toward these goals. These criteria can help businesses remain objective as they shop around. Writing them down can keep businesses honest and focused on the write criteria.

Remember That Human Factors Make or Break a Business

A business is not an abstract concept. It’s a collection of the people who help it run. Acquisitions are about more than finances, and cultural mismatches can destroy integrations before they even get off the ground. Businesses must develop a strong relationship with the owners of the company they’re partnering with. They must also nurture exceptional relationships between the staff of both companies.

Savvy business owners develop a post-closing integration plan well before the deal is complete. Ideally, people from both sides of the deal should be involved in creating and overseeing this plan, to ensure it’s something both companies can get excited about. Then, critically, businesses must treat their people well. That includes incentivizing key players to remain on board after the deal. Businesses must the right management in place, then empower them to make decisions and participate in the merger. People make a business. Treating them like they matter works, because ultimately, they matter more than all other factors.

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