Mergers and acquisitions (M&A) are pivotal moments in a company’s journey, particularly for small and medium-sized enterprises (SMEs).

Many entrepreneurs experience concerns and doubts that often delay the decision to engage in these transactions.

Let’s explore the main biases associated with sell-side M&A transactions for SMEs and how to overcome them.

1. Will my company be “undervalued”?

One of the biggest fears is that the company will not be adequately valued. This concern stems from uncertainty and a lack of trust in external appraisers who may not recognize the sacrifices and investments made over the years.

To overcome this bias, it is essential to ensure a fair and transparent valuation using established methodologies and providing detailed advice to explain every step of the valuation process. It is important for entrepreneurs to understand and share every aspect of the valuation to maximize its benefits.

2. What will people say about me?

Another common bias is the fear that the decision to sell the company will be interpreted as a sign of financial trouble or imminent failure.

This stigma can paralyze the decision to initiate an M&A transaction despite potential benefits.

Confidentiality is crucial to managing these operations, protecting the company’s reputation, and ensuring that sensitive information is handled with the utmost confidentiality. Building a positive narrative around the decision to pursue an M&A transaction, highlighting opportunities for growth and development, can help overcome this bias.

3. Will my team and I be valued?

Many entrepreneurs fear that their management team, often composed of family members, will not be recognized or valued in the new corporate structure. This can create internal resistance and insecurity about the future.

A people-centric approach is essential to recognize the value of the management team and ensure they are integrated and appreciated in the new environment.

Proposing mergers that respect the needs and expectations of the entire team can ensure a harmonious transition that respects existing business dynamics.

The Winnerge approach: from listening to success

Listening carefully to the stories of entrepreneurs, fully understanding their fears and concerns, is crucial for managing every stage of M&A operations.

It is fundamental to do this with sensitivity and ongoing synergistic engagement. Proposing only merger opportunities that best meet the entrepreneurs’ needs, while keeping the human aspect as a priority, is crucial for the success of these operations.

Creating an environment of trust and respect, where entrepreneurs feel safe and supported at every stage of the process, is essential for successfully navigating an M&A transaction.

Summary

Engaging in an M&A transaction can seem daunting, but with the right support and attentive, empathetic management, it can become an extraordinary opportunity for growth and development for an SME.

The key to success lies in building a promising future for the company together, ensuring the satisfaction of all parties involved.

If you are considering an M&A transaction, seeking personalized advice can be the first step towards success.