October 8, 2013

Prepping your technology business for an acquisition

This blog recently discussed Yahoo!'s latest acquisition. Many entrepreneurs who run technology firms strive to one day have their product or service sought after by top companies. While not every business will be wooed by Yahoo! or Google, there are still important steps to take to ensure that you are as prepared as possible for a smooth M&A process.

A recent Forbes article said that it's important for business owners to find ways to grow through technology. Even if the firm itself isn't centered around things like mobile applications, the latest company acquisitions show the importance of being digitally savvy.

Additionally, it's necessary for firms to retain top talent, as these employees will play major roles in pushing the business forward. Establishing the right employment agreements, with offerings like stay-bonus plans or stock appreciation rights plans, is essential to do for key workers. 

"Not all businesses and industries are as ripe for such lucrative deals as those recently acquired by Yahoo!," the article said. "However, by knowing what matters and motivates a potential buyer, the entrepreneur can increase his odds of selling his business for a premium to buyers such as [Yahoo!'s CEO]."

Also, the news source explained that the string of Yahoo! purchases further proves the importance of pursuing new markets. Essentially, entrepreneurs need to adopt technology and find ways to develop and train top talent so their businesses can continue to persevere.

Understanding your potential buyer is also necessary for businesses that are hoping for a technology acquisition. Yahoo! or Google might not be the top buyers, but knowing everything from potential prices to where a company wants to take your firm will keep everything moving forward.