In the financial press, stories about mergers and acquisitions between SMEs and large corporations are reported every day. While increasing revenue or getting exposure to a brand new client base are often the main motives for businesses to go into M&A however, it is crucial to have a well-thought-out strategy to ensure their success.

A successful M&A involves a complex procedure and the final result depends on many variables that have to be considered by both parties. A top-quality management team is crucial to ensuring that your business is able to effectively navigate the M&A process. External consultants and accountants can boost the credibility of your M&A strategy when you solicit their help.

The first step is to conduct an in-depth check on the financial health of your company. This involves analyzing profits and losses statements, cash flow, analyzing the equity and debt, and determining if you have enough cash flow to pursue an M&A transaction. The financial health check will uncover any ambiguities between your Management Accounts and Statutory filed accounts, which can cause confusion for a buyer.

The cost of integrating the two businesses is another significant aspect. It could be physical expenses like merging systems, offices and employees or human capital costs like calculating the costs of benefits and compensation programs. By involving human capital experts early in the process, you will be able to effectively assess these costs and you can find out more include them in the price negotiations for your purchase.