M&A: “Begin With the End In Mind” and Avoid Your Habitual Wear Patterns

We are all creatures of habit but sometimes those well-worn paths, that now come so naturally, create wear patterns that are maybe not so helpful.  When running a business, sales are always foremost in the minds of senior executives; whilst being focussed on sales is certainly not a bad habit, it can, however, be a challenge when there are other aspects of the business that require our attention and 100% focus - even for just a short period of time.
 

Staying focussed on your true objective is no less important when it comes to selling or acquiring a business; this seems like common sense that nobody would argue with.  The idea being, to decide upon your objective at the outset and then, to avoid being so distracted by the complex detail that your objective is forgotten.
 

The mental picture I always have, when thinking about this truism, is of an archer - maybe one of the ancient Japanese masters - in perfect concentration as they focus their attention single-mindedly on their target.  In many parts of the east, archery is studied, not just as a sport, but also as a form of moving meditation to synchronise mind and body. They call it “Kyudo”, which is the martial art of Japanese archery, literally meaning “the way of the bow”.

 

Staying Focussed On the Main Goal

Kyudo is a living ritual of meditative archery, rooted in the old Samurai warrior customs of Japan, where mastery of the bow was considered by the Samurai, not simply as proficiency with a lethal weapon but also, as an art form. The main goal was to retain a calm equilibrium whilst firmly in the here and now, focussed upon your target.
 

On first inspection, Kyudo is often seen solely as archery. Drawing the bow and shooting at the target resembles a test of skill, but Kyudo is not so much a sport and its true nature lies beyond hitting the target; the archer must look inwards, cut through and go beyond any kind of preoccupation, whether it be worry, hope, doubt, fear or any other distractions that may be happening around him/her.
 

It is a well-known and often quoted statistic that, even after an M&A agreement has been reached and a Letter Of Intent (LOI) has been issued, fifty per cent of deals still fail to complete.  This is potentially harmful to business and wasteful of time and resources.  Not to mention costly, with legal and accounting bills.
 

Throughout the M&A process, both the buyer and the seller need to remain clear about their objectives.  The buyer’s strategic thinking must be clarified IN ADVANCE, not during due diligence.  They need to begin with, “What do we want this acquisition to achieve for us in 12, 24 & 36 months’ time?” In addition, all main shareholders should have a shared, clarity of purpose before they commence and should not be trying figure it out ‘on the fly’ as they progress towards an acquisition.
 

The seller must remain calm and focus on their business to maintain its performance.  If the M&A process proves to be a distraction and financial results suffer as a direct result of this, it could prove very costly for the seller; their company may be devalued, which would, in turn, reduce the buyer’s valuation and potentially, jeopardise the deal.  In fact, they may never reach their pay day, regardless of the final valuation.
 

Boss Equity works on buy and sell mandates for companies in the ECM, BPM, BPO, Information Technology sector, to provide them with a structure and purpose to prevent wasted time, resource and money; we employ a tried and trusted process that takes our clients through a step-by-step method of clarification, qualification, confirmation, reflection and action. 
 

It really does pay to be mindful of the likely hurdles to selling or acquiring a company and to “Begin with the End in Mind”