This article are provided for information purposes only, and are not intended as legal advice.

Buying a business and combining with your existing business

March 3rd, 2009

If you buy a business to combine with an existing business, you must think if you will combine the two companies or if you will run them as two separate entities.  Below is a few issues which you will need to address:

  • cultures, your place and the new business will have different cultures, you need to spend time determining the best attributes of both and combine them together without alienating people in both companies.
  • locations, do you consolidate locations?
  • accounting software, do you keep two systems or do you integrate the accounting functions by either using the current software from one of the locations or purchase new software and change both software
  • integration of staff, who has seniority?
  • do you realign job functions in order to become more efficient?
  • do you consolidate suppliers and have larger purchasing power by reducing the number of suppliers
  • do you realign the sales territories so that two sales people do not call on customers in the same territory
  • if you have delivery of goods, do you consolidate the transportation function and delivery routes to have a more efficient delivery system?
  • increase the management team to over see both businesses
  • do you appoint one person to be the overseer of the integration of the two businesses?
  • do you structure the businesses into multiple divisions, one division or multiple companies?  Have you consulted your accountant to come up with an efficient tax and operating structure?
  • do you have the right personnel for your business or do you need to hire more senior staff who will be better able to administer the larger operation?

Filed under: Buying a business — Gary Landa @ 10:21 am

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