While it might make sense on paper to pursue a particular merger, business is not just about the figures.
Sometimes, these events can have a negative effect on staff and customers, which means they don’t turn out to be as profitable as you hoped. Here are a few examples of how that might happen:
It affects staff stability
The buzz around the office is that the bosses are looking to merge with another company. Any employee knows that means they might lose their job. It could lead to some staff pre-empting things and leaving or, if recruitment companies get wind of the potential merger, they may headhunt your best staff.
Other staff might not be so proactive but instead, react by withdrawing. The fear of losing their job after may make them wonder why they bother going the extra mile.
Customers look for alternatives
Jack and Rosemary have shopped with Ed’s Home Reared Meat for years and even though they moved out of town a long time ago they made the journey once a month to purchase goods there. They valued the relationship and wanted to support the business.
If they turn up to find that the shop is now part of the Anonymous Meat Corporation they may decide the journey is no longer worth it, especially if the staff and feel of the place have changed, as they are prone to do in a merger.
By merging two companies you may unsettle two sets of staff and two sets of customers. While mergers can bring great benefits to owners, staff and customers you need to do them with great care, and getting outside help is wise to examine all the angles and any legal implications things like laying off staff might have.