4 Ways to Ensure the Perfect M&A Strategy

About a third of middle market M&A companies assert that developing the right strategy is their biggest M&A challenge. Many companies react to exciting opportunities, causing them to rush into ill-advised deals with little or no strategy. Without a strategy, it’s nearly impossible to execute a quality deal.

If you struggle to develop a quality acquisition strategy or don’t even know what one looks like, here are four simple tips for getting it right.

Make an Honest Assessment

Take some time to review your company before looking at other businesses. You must know your own strengths and weaknesses before you can even begin to sell these points to a deal partner. Even if you’re confident you know all there is to know about your business, spend some time introspecting anyway, and involve your team. You might be surprised by what you learn, and by the ways you find to align with your acquisition team.

Make Time

Rushing into an acquisition without a clear strategic plan is a recipe for failure. Set aside time to ask foundational questions and determine what’s right for your company. While moving swiftly is always key to success, you must find ways to balance speed and intelligent thought. Before looking at acquisition prospects, ensure you and your team have a keen understanding of your M&A strategy can help you achieve your goals.

Have One Reason—Not Dozens

A lot of weak reasons can begin to look strong when you start listing them. Don’t allow yourself to be fooled by the numbers. If you cannot identify a clear and compelling reason for your M&A strategy, then you don’t have a reason. Put your reason on paper, and refer to it often. Anything that doesn’t get you closer to that goal is a waste of your time, and possibly an exercise in futility.

Keep Your Process Disciplined

All the strategizing in the world is worthless if you don’t follow your plan. Your strategy must remain front and center as you pursue an acquisition. A disciplined process that uses objective and measurably criteria must guide the journey.

Chasing after the next big deal without a clear goal in mind is a recipe for disaster—one that distracts you from your ultimate goal of a successful merger. Details matter. Don’t make the mistake of a strategic acquisition that involves no strategy.