If your New Jersey company is struggling to remain profitable on a regular basis, it may be a good idea to consider merging with another business. This may give your firm access to quality employees, a larger customer base or other resources that it needs to be successful over the next several years or decades.
A merger may allow you to scale your business
A business could easily spend millions of dollars buying the land, equipment and other tools needed to grow its operations. Even after acquiring the assets it needs to obtain its preferred growth rate, it can still take several years for a company to hit its sales targets. Buying an existing company may be a less expensive, faster and more convenient way to scale an organization without angering shareholders.
It never hurts to get rid of a competitor
To some degree, competition makes your company better because it forces your employees to regularly come up with new ways to serve its customers. However, in some cases, acquiring a competitor allows your firm to offer products and services that it wouldn’t otherwise have the ability to provide. Furthermore, merging with a competitor may allow your company to retain enough market share to make it worth your while to stay in business.
Some companies are built to be acquired
It isn’t uncommon for entrepreneurs to build companies with the intent of selling them to larger businesses at a later date. Ultimately, selling your company to an established organization provides you with a way to exit the firm without diminishing its brand value. Ideally, you’ll talk to an attorney who has experience with mergers and acquisitions prior to agreeing to any deal to transfer ownership of your organization.
If you are considering a merger, it may be worthwhile to discuss the idea with an attorney. He or she may be able to discuss the potential benefits of doing so as well as review the terms of any proposed deal.
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