Will You Be the Victim of a Merger—Or Will You Come Out on Top?
As a small business owner, you’re likely going to be impacted by a merger or acquisition at some point on your journey. If you’re not prepared, the resulting complications can ruin your business. But you can be ready for what happens next so that you come out ahead when the dust settles.
First, the definitions: Merging two companies is a strategic business process in which two separate entities join together to form a single, new company; an acquisition occurs when one company absorbs another without forming a new entity. For simplicity’s sake, in this article we’ll use “merger” as a blanket term to include both.
A merger can have enormous ramifications for employees and customers alike. While mergers can bring about benefits such as expanded product offerings and increased competitiveness, they can also result in negative consequences for the SMBs affected by them.
Often, the customers most negatively impacted by a merger are the small businesses that have been depending on one of the merged companies for their goods or services. For example, when a merger results in changes to product offerings, pricing, or customer service, some clients can suddenly find themselves forced into using an enormous one-size-fits-all service provider and losing much of their creative and cost leverage. This can be particularly problematic if you have developed a strong relationship with the company and are now faced with changes you could not have anticipated. The person who was your most helpful contact inside the provider company may be the very person who’s laid off. You can take steps to ensure that your needs are being met, but this could mean communicating your concerns to a huge company with many layers to get through before you reach someone who can actually help you. It can be a frustrating experience.
Is It Time to Leave Your Comfort Zone?
Yet a merger can also be a blessing in disguise for SMBs. It can be the push that was needed to seek out new and better ways to acquire products or services. It can even be the impetus to seek out the latest technologies that make your work easier. For instance, the smaller ad agency you have been using gets swallowed up by a big firm that doesn’t accept accounts your size, so you discover the whole new world of online marketing strategies, and pretty soon you are drawing many more customers to your website than ever before. Here’s another example: Until your traditional print-to-mail provider is acquired by a company that only handles volumes much bigger than your typical mailing needs, it may not have occurred to you to use a cloud-based mailroom instead.
A Setback or an Opportunity?
Mergers often happen due to the desire to increase market share, gain access to new markets, or achieve economies of scale by combining resources and reducing costs. This can squeeze small businesses out. We’ve all seen it—the two-story department store that closed the doors of several small stores in the vicinity, the big car repair chain store that edged out the family-owned repair shop down the street.
But SMBs can capitalize on a merger by snapping up the clients that fall through the cracks.
One such SMB was Amazon. In 1995, founder Jeff Bezos' parents invested a mere $250,000 in the start-up. Mergers and acquisitions in the publishing industry had and continue to have an impact on the variety of books offered, as publishers consolidated and pared down their lists of titles with each merger. Besides that, far fewer authors manage to land contracts with the big publishing houses. But there is a huge number of titles available in print, so Amazon was able to offer the world's largest collection of books—from day one, out of the garage of a rented home. While large booksellers supply bookstores with books by the carton, Amazon could sell to the end consumer, as little as one book at a time.
DocuSend’s history has some similarities to this. Traditional print houses require a contract and setup fees. Because they only handle large volumes, this is a reasonable percentage of the total cost. But this was a problem for SMBs and independent professionals who must mail smaller volumes. We came up with a way they can upload any quantity of documents, no matter how small, to be printed and mailed with a pay-as-you-go online service that eliminates the need for contracts and setup fees. It’s a better way to mail all kinds of documents: invoices, statements, notices, flyers.
As companies get larger and larger due to mergers, in many cases the personal touch that smaller companies provide is lost. Just as Amazon prides itself on being an exception to this rule, we at DocuSend are proud that we still offer the same level of customer care we did when we first started.