How to Merge or Acquire Successfully | EP 180

So the first big idea that I want to talk to you about today is like the honestly like the deal is the easy part, culture is where most mergers live or die.

So today I guess in this first part I want to explore with you like why most mergers look like brilliant on paper, brilliant on the spreadsheet but they actually fall apart in the like the corridors, the conversations, the culture of the team and the businesses that we're actually bringing together because most founders and most owners obsess over like the numbers they look at the they get excited about like what their business is going to be worth post merge but they actually forget that they're bringing two groups of humans together so as i mentioned like our our journey from 3 million to 30 million we we went through multiple mergers and acquisitions along the way um you know we we We learned so many lessons.

We learned what to do, what not to do along the way.

And I guess today I'm really excited to kind of share with you behind the scenes on that journey and actually what it took from doing multiple M&As along the way to actually successfully merge with a business or acquire a business and bring it together on the back end.

So like I said, like everyone falls in love with the financials, the numbers, the combined revenue, the, you know, the the increased multiple on your EBITDA and all those sorts of things.

But and the client list and the cross selling and cross pollination, like there's so many exciting things that happen in an emerged or an acquired environment.

But most owners never plan for the cultural integration side of things.

So two businesses can deliver the exact same services and come together in a merged environment or an acquired environment and have completely different systems processes and fall apart on the backend integration and things.

while you're celebrating the deal and getting excited about bringing everything together, you've got two teams that are quietly kind of sitting there asking themselves like, what does this mean for me? Is my job safe? Who's my boss now? There's often Founders get excited about the numbers and the deal and pulling things together They forget about the integration of the team on the back end And so trust doesn't transfer on on settlement day Just because you sign an agreement to buy a business or merge of the business doesn't mean that the two teams trust each other That doesn't mean the two teams have been integrated.

Well that trust has to be earned over and over again and You know, for example, if the two cultures clash and you don't manage it, your best people start quietly walking out the door and now you've bought yourself a problem, you haven't bought yourself a business.

So if you're thinking about M&A, if you're starting the process of a merger or acquisition, or if you're kind of, you know, partway down the process and all you've really looked at is like the revenue, the client list, the numbers, the post-merge financials, all those sorts of things, which naturally you're going to do from a logical business owner point of view, I want you to ask yourself this, have you, outside of all of those things, have you actually planned for how you're going to bring these two groups of people together? Have you actually thought about the cultural integration or have you just done a deal on paper, got excited and hope the rest kind of sorts itself out? So the second thing I want to talk to you about is this concept of bolting two businesses together is not the same as bringing them together.