It's been almost exactly a year since I merged my advisory business consulting firm, Angie Herbers Inc., with Kristen Luke's Wealth Management Marketing Inc. Over the years, I've helped many advisors merge their firms, and from those experiences learned a great deal about what works and what doesn't, but there's nothing like actually doing it yourself to get a whole new perspective. I've learned a great deal about merging two companies in the past year. While the consulting business isn't exactly like the advisory business, it's very similar; what's more, much of what I've learned about mergers would apply to any small business. When I look back over the past year, there are a number of things that I would do differently in my next merger. Hopefully, they'll help you with yours:
1) It's essentially a new job. No matter how much you believe that your role as owner won't change in your new firm, it will. The firm that emerges will be vastly different from the two businesses that merged together. Consequently, what needs to be done to run the new business—both at the start and ongoing—will be vastly different as well.
For me, having an equal partner was a new experience, but that was only the beginning. In a small business, the owner spends some of their time on management, but the majority of our efforts are devoted to working with clients and getting new ones. In a larger business, those three functions become separate jobs. That means the owner has to choose which one of their three (and usually quite a few more) former jobs they are now going to focus on. And if the firm is big enough, you won't actually get to do any of them: you'll just manage the people who do. Consequently, it's very important to decide at the beginning which job you're going to do and which jobs you're going to give up—and most importantly, whether you can be happy in your new job.
2) It's a new business. In a merger and a rebrand into a new company (like ours), rather than just an acquisition, there is a level of emotional pain in letting go of what you created and built. This isn't your firm anymore: It's a new company that is yours and your partner's, and increasingly, the employees'. On one hand, you're losing your "baby," and on the other, you're taking over someone else's teenager. Let me tell you—it's a shock to one's system.
The good news is that it's also an opportunity to clean house: to jettison the things that weren't working in your old business and take only the things did that work into the new business. It's a real benefit, but to get the most out of it, you need to do some difficult things: Be very honest about how things were really working in your old business and deal with your resulting vulnerability on the things that weren't so good. If you can't take a step back to look at your old business objectively, you're going to bring your old problems into your new business, which can only create much bigger problems.
3) Accept that all your routines will be broken and your comfort zones lost. Whether we know it or not, at work, we all get into routines in doing our jobs and "comfort zones" with the way we do them. Because this is truly a new job, all that will go out the window. Things will come at you from all directions, you'll have to figure out how to manage new responsibilities, and you'll be pushed to the limit in a short time. I wish I could give you a formula to handle it all, but I don't think there is one: You'll need to create one for yourself, in your new job. So just accept that this is all normal, do the best you can and have faith that you'll eventually create a new routine and find a new comfort zone.
