What are some things you have done to set your company up for a successful merger or acquisition?

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FINANCIAL POST

CA LG A RY H E R A L D

C A P I TA L Q U E S T I O N

WHAT ARE SOME THINGS YOU HAVE DONE TO SET YOUR COMPANY UP FOR A SUCCESSFUL MERGER OR ACQUISITION? Entrepreneurs discuss the ways they ready themselves for integration “We’ve built our company to be the best company we can, therefore leaving it in the best position for success, whether or not that includes mergers and acquisitions really doesn’t matter to us. We also use industry standard tools so we can both compete as well as make potential integration easier.”

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Shawn Freeman, president of TWT Group Inc., twtgroup.ca

1. Manage a pipeline of revenue opportunities systematically. Targets keep focus, and help prioritize. 2. Demonstrate growth of revenue and profit. 3. Actively manage cash flow to make adjustments to expense and investment decisions and opportunities. These all like sound financial reports, but the discussion they drive are always about our clients, our company, and our competition. Don’t make it just about the numbers. We make it about the business decisions we need to take.”

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Len Nanjad, partner at COREinternational, coreinternational.com

“Any successful business requires strategies, systems and processes. It takes time to create documentation for each, however, without them it would be difficult for someone to take over or become involved in the company. We have consciously started documenting all aspects of our business, not only for the possibility of a merger or acquisition, but for efficient management and operation of our business.”

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COMMUNITY QUESTION

How are you building community both in and around your business?

Donna Neumann, founder of Annie&Frederick Inc. (annieandfrederick. com), thinks that preparing for integration is useful for any business. “I think every business should be prepared for this possibility even if it is not the specific intent at a given point. We ensure our business has a consistent, scalable plan so that it can easily be translated into a profitable business opportunity elsewhere, but is nimble enough to accommodate regional differences. We are also implementing clear, proven business systems and processes to support the business effectively as it grows. Further, we are creating meaningful metrics to measure results, guide growth, and identify additional efficiencies. Lastly, but certainly not least, we work diligently to establish and foster mutually beneficial, long term relationships with clients, suppliers, business partners such as legal and financial, and the local community.”

Business owners helping business owners

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“Building a predictably profitable business that succeeds without the founders is one of the keys to be attractive to potential merger partners. This happens by executing on routines and building a business with sustainable growth profit after paying the founder or owner a competitive wage. We revisit each and every decision with the goal of assessing the impact on our profitability and deciding if that action provides the most valuable result. If there is another more impactful option, we go with that. Capturing value for investors leads to improved valuation and more attention from potential merger partners.”

P H O TO BY: RO N C HE COR A

Laura Bechard, business coach with Bexcom Business & Executive Coaching, linkedin.com/in/ laurabechard

“Any business should ensure that the leader is not the same as the business. Although the leader or owner is critical to the operation, if he ‘gets run over by a bus’, the business must be self sustainable. A buyer needs to see that there is back up in the organization and that it’s not totally dependent on one person.”

“If merging or being acquired is part of your plan it’s important to be great at what you do and have a solid customer base. Unique, proprietary processes help put a value on your company if you’re a service-based business. For us, it’s our amazing clients, knowledge of our craft, and unique strategic planning, training and social media management process.”

David Birkby, president of Vector Energy, vectorenergy.ca

We know that a business can impact a community on many levels, from clients to staff, and any other area where we build and maintain positive relationships, which is why Charles Richard Cotton, president of Enlightened Soccer Inc. wants to hear from you: How are you building community both in and around your business? You can answer the question in two ways: Open today’s Capital Ideas email if you’re a member or visit capitalideascalgary.com. We’ll publish the best answers, along with your business name and website address, on Sept. 10. For more information on The SoccerGenius Centre’s crowdfunding campaign, head to albertaboostr.ca/explore

Wilma Slenders, president at Transcend Management Advisors Inc., transcendmgt.com

David Wald, chief idea at guy at Social Sesame Inc., socialsesame.com

These answers are in response to a question posed by Wellington Holbrook, executive vice-president of ATB Business. Here’s his advice: “There are three critical things you need to organize to set your company up for a potential merger or acquisition. First, to ensure you really know your company and to maximize the value, you need to make sure you have quality financial information (it’s probably worth getting audited statements to prepare your business for acquiring or merging). Second, document your processes. So many small businesses I have known have lost value because the processes have been locked in the head of the entrepreneur. Lastly, know your competitive advantages relative to the company you are acquiring so you can properly assess the benefits that the target company will bring to.”

R O U N D U P : R E C E N T P O S T S F R O M C A P I TA L I D E A S M E M B E R S Find the full posts on these members’ LinkedIn profiles. We’ll curate a selection every Friday on our LinkedIn group, Capital Ideas Alberta. To bring yours to our attention, email it to hello@capitalideascalgary.com or use the hashtag #capitalideas when you post to LinkedIn.

From “Ashley Madison hack -- crisis communications case study” by Shawn Alain, president at Viral In Nature (viralinnature.com):

From “What’s the secret formula for your business?” by Dylan Gallagher, founder at Bridge Capital ( bridgecap.ca):

“The conversation is going on all around them and if there’s one thing you’ve heard me say over and over again it’s that ‘The conversation is going to happen with or without you so it’s better that you’re a part of it.’”

“How does your business make money? Could you write it down on the back of a napkin so that anyone could understand? Every successful business has a formula they follow to generate profit while delivering outstanding service to their customers.”

From “Time for a change” by Jenn Egroff, founder of Catalystica (catalystica.ca):

“What was missing was a sense of purpose. I was missing the freedom to focus on what I was good at and more importantly, what I was overthe-moon passionate about.”


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