Investment | Teik Oh

Four Steps to make a Merger Work

Apr 27 2015

One of the most difficult operational issues is the merger of two corporate cultures.

If you are running a micro-business or even a small business at the smaller end of SME’s, you might think this does not apply to you. I disagree.

From time to time small businesses will “merge” with another culture. You may buy a business that is already operational and with staff who have been there for some time. In this case you will need to “merge” your personal business culture with that of the business you just bought. If indeed you already run a business, you might buy a smaller one – that’s a merger of two cultures. Perhaps you are in a situation where one of your competitors or colleagues suggest you “get together” – that’s an obvious merger.

Whatever the situation, if you are faced with having to put together two people or two groups of people, it is not a simple equation of 1+1=2. Different organisations have different values, different processes, and different ways of doing things that are justifiable to each. The key is to get together and start working efficiently as soon as possible.

Mergers can be successfully managed if you understand some key success factors and there is actually a “formula” that you can apply.

The key success factors of a merger are:-

Effective planning and execution
An overall and well communicated vision of why this is taking place
Effective and quick alignment and integration
Fast and focused transition.

I summarise the implementation of these key success factors as “Plan well, Fit Quick, Work Quick, and Grow Quick”.

Comment 13

Recession proof your business

Jan 02 2015

Is it possible to recession-proof your business? Probably not, despite the wealth of internet articles on how to do so (about 3.3 million hits on Google and counting).

However, what is possible is to arm your business with a series of simple and common sense business strategies to protect it against tough times.

There are defensive and offensive strategies. As profit performance heads south, it is difficult not to panic and begin to tighten all the hatches. However you can tighten too much. Hence, while it is natural to concentrate on the defensive strategies, it is important to keep in mind offensive strategies – those that your business should implement to ensure that you are the one in your industry that keeps selling when others are closing down.

Let us deal with the defensive strategies first. There are six strategies that you need to implement. These are:
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Comment 13

Work out your divorce before you get married!

Dec 17 2014

As a business advisor, I have advised my fair share of start up businesses where the owners have been friends or colleagues starting as co-owners. I have also sat through many a business dispute between these people who started off as friends, colleagues, and co-owners!

You will be well familiar with the much touted statistics of the large proportion of start up businesses that fail. Yet even businesses that succeed may eventually (and more often than you think) have a falling out between co-owners.

It is predictable that when you are at the beginning of an exciting idea you think it will last forever. Yet, it is also predictable that circumstances will change and the business is unlikely to stay the same. The business may ebb and flow and different people may have different risk tolerances for that ebb and flow. Opportunities may arise and different people may view those opportunities very differently depending on their own priorities.

If nothing else, relationships change with time, emotions change with time, energy levels change with time. Profits and growing wealth (or the opposite!) raise questions never asked at the start of the relationship.

So, when asked what is the single most important structural thing to consider when two or more people start a business together, I don’t say type of entity or share values, I say “write up your divorce papers before you get married!”
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Comment 13

6 Things to do before you start your own business

Sep 25 2014

So you want to start your own business?

If you are like all small business people, you have decided to start your small or kitchen table business because of factors such as being your own boss and all that picture entails. Today, this seems even more possible due to the technology that you can use from home or a shared space that allows you to keep costs down in comparison to a bricks and mortar business.

While there are even government websites encouraging you (there’s one that has a header “Open for Business: Simple, Fast, Easy) headlines still exist that shout out nearly 80% of businesses close within 18 months of starting – and you can bet most of these are micro, small, kitchen table businesses. Read More

Comment 13

Let’s all stick to our own knitting!

Jul 28 2014

I’m about to insult lawyers.

The rest of you – you needn’t cheer quite so raucously. I only choose to use lawyers as an example of a highly trained group of professionals, skilled and experienced in what they do and good at their multi-faceted jobs, but because of that, think that they can self-handle other aspects of their business where different specialist skills and experience are required.

I could have chosen accountants, or doctors, or engineers (there, some of you are not so comfortable now are you?).

One of my clients is a firm of commercial lawyers specialising in insolvency. In their business they run the constant risk that their clients cannot pay. To give them their due they always perform at their best and never stint on service, despite this possibility, but now and then, they get caught.

In one such instance they worked for an owner of advertising billboards scattered around the suburbs. Having satisfactorily won the case for their client they found that the client is cash strapped and unable to pay them, asking for a payment plan over a year or so. Clearly not a good situation. The senior partner, true to the entrepreneurial spirit of the firm then negotiated a contra arrangement where they get to use two billboards and paste up advertising for the law firm over a year. In this way a $20,000 doubtful debt is used to gain $40,000 worth of billboard advertising – quite an advantage? Read More

Comment 13

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Category - Investment

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Four Steps to make a Merger Work

Recession proof your business

Work out your divorce before you get married!

6 Things to do before you start your own business

Let’s all stick to our own knitting!