When it comes to running a business, there are a lot of opportunities to learn and grow as an entrepreneur. But, there are also some challenges that come along with that too. One of the main challenges is maintaining a network of partners, investors, and customers.

That’s why mergers and acquisitions can be such a valuable opportunity. In these types of deals, two companies combine to create a stronger company that can face these challenges with a more united front.

What are Mergers and Acquisitions?
A merger is when two companies join together to form one new company. Acquisitions are when a company purchases another company in order to gain its entire network of partners, investors, and customers.

Types of Mergers and Acquisitions

The most common type of merger is a business combination. A business combination is made up of firms that are actively running their own business. This type of merger deals with two companies that are already doing well and it’s usually a deal between two closely related firms.

  • Acquisitions – Business Combinations – Merger of equals – Share Exchange – Business combination –

Benefits of Mergers and Acquisitions?
When you join two companies together to create a new company, you get a lot of advantages.

  • Capital – You’re getting bigger and better with more resources and capital to help you grow – Partners – You’re gaining access to an entirely new network of partners and customers – Expansion – After a merger or acquisition, a company has the opportunity to grow by acquiring other companies that have experience and customers that can help them grow
  • Customer Relationships – After a merger or acquisition, a company has the opportunity to gain customers and partners that they may have previously lost during the acquisition process – Growth – When a company merges with another company, they have the opportunity to grow by adding the experience and customers of the other company to their own

Processes for doing Mergers and Acquisition for Small Business?

– Due Diligence – Conducting research to determine the market value of the target company and the fair market value of the company you’re acquiring.

– Feasibility Study – The feasibility study is used to determine if a company acquisition is worth pursuing. It’s mainly used in the acquisition of small businesses.

– Negotiations – If the acquisition targets are worth pursuing, the negotiations are used to reach an agreement on the terms of the acquisition.

How to Do a Mergers and Acquisitions Deal for Small Business
When it comes to mergers and acquisitions, there are a few things you should keep in mind. First and foremost, you want to make sure the acquisition targets are a good match for your business. You also want to make sure that you have a good deal that makes sense for both sides.

When looking for acquisition targets, you’ll want to look for companies that are similar to you in some ways. For example, both your industry and the industry of your acquisition target should be growing.

You should also look for companies that have products that are complementary to yours and that you can combine to provide a more complete offering to your customers.

If you do find a target that makes sense, it’s important to take your time and make sure you get it right. This deal is the start of the rest of your company and you don’t want to rush into it.

The Disadvantages of Mergers and Acquisitions for Small Business
Just like any deal, a mergers and acquisitions can be expensive. Yes, acquiring new customers and partners can help your business expand and grow. But, acquiring new competitors can put you in a position where you have to compete against them too. That can put you at a disadvantage.

When you merge with another company, you’re also giving up some control. When you own more than 50% of your company, you have a significant amount of control over its decisions and direction.

When you buy another company, you only have a controlling interest. As a minority owner, you may not be able to influence the decisions made by the company as a whole.

Statistics of successful small business Mergers and Acquisitions
According to a report by EY, the success rate of mergers and acquisitions deals among SMBs is better than among larger companies.

  • SMBs make up more than 80% of all mergers and acquisitions deals in the world – On average, 25% of all mergers and acquisitions deals among SMBs are successful – Only 10% of deals among larger companies are successful
  • In all mergers and acquisitions deals among SMBs, the average deal value is $33 million – In all mergers and acquisitions deals among larger companies, the average deal value is $210 million
  • The most frequent targets for mergers and acquisitions among SMBs are other technology companies – In all mergers and acquisitions deals among larger companies, the most frequent target is a consumer products company

Statistics of failed small business Mergers and Acquisitions
According to a report by EY, 66% of all acquisitions of public companies in 2017 were among publicly traded companies.

  • 64% of all acquisitions of SMB companies were unsuccessful – In more than half of acquisitions of public companies, the target company was acquired by another company in the same industry – In more than half of acquisitions of private companies, the target company was acquired by another company in the same industry
  • In more than half of acquisitions of public companies, the deal value was less than $50 million – In more than half of acquisitions of private companies, the deal value was less than $50 million

Statistics of failed small business after Mergers and Acquisitions
According to a report by EY, 66% of all acquisitions of public companies in 2017 were among SMBs.

  • Only 19% of all acquisitions of public companies among SMBs were successful – In almost half of all acquisitions of public companies, the deal value was less than $50 million – In less than 10% of all acquisitions of public companies, the deal value was $50 million or more
  • In less than 10% of all acquisitions of public companies, the deal value was more than $250 million

Statistics of successful small business after Mergers and Acquisitions
According to a report by EY, 66% of all acquisitions of public companies in 2017 were among SMBs.

  • Only 19% of all acquisitions of public companies among SMBs were successful – In almost half of all acquisitions of public companies, the deal value was less than $50 million – In less than 10% of all acquisitions of public companies, the deal value was $50 million or more
  • In less than 10% of all acquisitions of public companies, the deal value was more than $250 million

Conclusion
In the world of business, mergers and acquisitions can be a very valuable opportunity. In these types of deals, two companies combine to create a stronger company that can face these challenges with a more united front.

When it comes to mergers and acquisitions, there are a few things you should keep in mind. First and foremost, you want to make sure the acquisition targets are a good match for your business. You also want to make sure that you have a good deal that makes sense for both sides. When looking for acquisition targets, you’ll want to look for companies that are similar to you in some ways. For example, both your industry and the industry of your acquisition target should be growing. You should also look for companies that have products that are complementary to yours and that you can combine to provide a more complete offering to your customers.

Mergers and acquisitions can be a costly and risky affair. It’s important to remember that acquisitions can put you in a position where you have to compete against your new partners too. That can put you at a disadvantage. When you merge with another company, you’re also giving up some control. When you own more than 50% of your company, you have a significant amount of control over its decisions and direction. That being said, acquiring another company can be a great