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3 critical factors every business merger needs to manage

At some point, rival businesses in California might consider merging as a way to dominate market share. The process could allow the joined companies to apply resources toward attaining greater success, but it requires great attention to detail, especially in regard to infrastructure, finances and human resources.

Infrastructure refers to things like the IT systems, existing products or services and the technical demands of data security and privacy. The joining of two systems will entail a transition period. Merging companies should strive to combine their systems as smoothly as possible without interruption in function or customer support.

Financially, companies examining the potential of a merger must determine if they have the resources to achieve their objectives. The parties must work off of clearly stated business objectives and often be willing to wait for returns on investments. Human resources could represent the most volatile aspect of the merger. Many employees will be concerned about their places in the merged organization. Open communication could ease anxiety and prevent disruptions in morale. The merger process also needs to make clear choices about who will be in charge of the combined entity.

One entrepreneur recommended that the people arranging the merger avoid email to discuss the details. Face-to-face meetings with all of the parties present could prevent confusion and disputes. It is also advisable that each of the companies have their respective mergers and acquisitions attorneys present at these meetings. Experienced legal counsel can provide advice as to how best to structure the proposed transaction and the regulatory compliance that will be required.

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