Category: Business News

A merger and acquisition (M&A) is not for the faint-hearted. Rather, it is a rigorous process with a required degree of detail that will make your head spin. A myriad of processes have to go right for this sort of business dealing to be successful.

Related: An M&A Wave Is Coming: 4 Ways to Determine Whether You Should Sell

But the good news is that successful M&As are not exclusive to Facebook-like acquisitions or Berkshire Hathaway buy-overs.

There are many reasons why top executives and business owners decide to do a merger. Some mergers are a way to kill competition by buying up rival companies. Other reasons may include the ability to easily gain new customers, boost business productivity, seamlessly penetrate a new market and even save a business from going under.

Whatever the reasons for a merger, the entire process starts and ends with strategy. You have to be willing to look at everything from culture fit, geographic location and product to the market, the industry and business perspectives. No one deliberately plans to enter a bad deal, but unfortunately, it does happen.

Here are a few tips that can help you keep your focus on the right things if you are about to execute an M&A.

1. Thoroughly evaluate your liquidity and financial capability.

While an M&A is not simply a financial transaction, you will be remiss to misinterpret the importance of financial stability while executing such a deal. If the recession taught businesses one thing, it is the importance of liquidity above profit-and-loss statements. Before embarking on a M&A, ascertain that your company has enough liquidity to make and sustain such an investment.

Also, keep an eye on your capital structure; you want to be sure that it can handle the added strain and responsibility. If each of these questions can’t be answered in the affirmative, it may be a bad idea to go forward with your plan. Reason? Unless you can handle a sufficient amount of debt and access equity-capital funding strategies to provide you with the perfect balance sheet, you will need to hold off on that M&A.

2. Put together the perfect team.

Almost every company has these three divisions: finance, sales and marketing and operations. So, it makes sense to pull together a pool of experts that represent these areas of expertise. Depending on your unique situation, you may need to bring in external help in the form of legal counsel, valuation experts, investment bankers and accountants.

It is extremely important that the people who make up this team be able to work together; this is neither the place nor the time for maverick thinking. Everyone’s eyes must be on the same objective, and these experts must think cohesively and communicate constantly.

They must also be willing to carry out their respective responsibilities within the limits of their authority as defined by the CEO or someone appointed by that person.

3. Establish your goals and measure for success.

Start by asking yourself some pertinent questions. Is your objective to boost your market share? Are you seeking to bring in new products, services and intellectual property under your corporate wing? Are you trying to break into new and contiguous markets?  Are you trying to eliminate a competitor or to achieve vertical integration?

This introspection will definitely help you set goals for your business, and make decisions in the right direction, to keep you from veering off track.

4. Make sure information can be shared securely and efficiently.

In today’s world, you’ll hardly hear of a company (buyer) sending over a team to the physical location of another company (the seller) to look at its books. We live in a digital world today that has eliminated the need for that hassle. However, this digitization brings its own hazards, especially in the form of security issues.

Related: My Post-Acquisition Report Card

For this reason, consider using a virtual room to help both parties look at each other’s business documents securely and efficiently. Virtual data rooms act as a neutral and secure off-site location where members of both teams can be free to share documents and collaborate effectively.

Virtual data rooms help expedite the M&A transaction process, not to mention that they significantly cut down costs such as transportation (if you were to fly in your executive team to physical data-room locations).

5. Get the best leadership team you can.

If you’re planning to merge two separate entities, this means there will definitely be compatibility and integration issues, no matter how hard you’ve worked to reduce the risk of that happening.

Every transition requires the presence of strong leadership, whose members will be chosen to define the tone and set a precedent for the direction and efficiency of the new entity. Daniel J. Dewitt, a psychologist and partner with Shields Meneley Partners, a Chicago-based consultant, has suggested the right questions to ask, to avoid making the wrong leadership choices.

These include questions like, “Is the executive a clear, quick thinker?” and “Does the executive have strong people skills?”

Importantly, these transition team leaders must be chosen from both sides of the deal.These people will already understand the workings and culture of their respective companies and understand their employees on a personal level; and those advantages trump the hiring of new executives.

Related: How to Retain Your Company Culture After Getting Acquired (And Why That’s So Important)

In addition, these leaders will be able to set expectations and develop a well-defined transition and work plan while maintaining flexibility and adaptability as conditions continue to evolve.

It’s human to try to allocate blame on someone or something else — to think one of your employees dropped the ball or that luck simply wasn’t on your side. It’s natural.

But it isn’t productive. It won’t help you or your company if you simply shrug off failure as someone else’s fault, because you won’t learn from it that way. Entrepreneur Network partner Business Rockstars spotlights Robert Sillerman, who explains that instead of blaming someone else you should realize everything is your responsibility. He says if you’re truly passionate about your project, you’ll take active steps to improve and make sure that mistake never happens again. 

Otherwise, you’re just making excuses.

Click play to learn more.

Related: All Great Entrepreneurs Share This Personality Trait. Do You Have It?

Entrepreneur Network is a premium video network providing entertainment, education and inspiration from successful entrepreneurs and thought leaders. We provide expertise and opportunities to accelerate brand growth and effectively monetize video and audio content distributed across all digital platforms for the business genre.

EN is partnered with hundreds of top YouTube channels in the business vertical. Watch video from our network partners on demand on Amazon Fire, Roku, Apple TV and the Entrepreneur App available on iOS and Android devices.

Click here to become a part of this growing video network.

Influencer marketing startup Experticity has taken work perks global, with the company offering to pay for its charitable employees to go on all-expenses-paid humanitarian trips around the world.

“We’re always trying to find interesting, unique ways to motivate our employees and make them proud to work,” Experticity CFO Heather Mercier told Entrepreneur.

Related: The Well-Being Perks You Never Thought to Offer

So how does it work? Any employee who has been at the company for at least one year and participated in payroll giving for at least six months (that could be donating between $2 to $150 per paycheck) is given the opportunity to travel to Nepal, Bolivia, Kenya or Ecuador on the company’s dime. On these trips, Experticity volunteers could be working on a number of different projects depending on the needs of the place they visit, including building classrooms, community water systems, health clinics or personal hygiene workshops or training locals in micro-enterprises.

“This is a really unique way to give to our employees and fuel their passion for giving back to the world and building camaraderie,” Mercier says. The program is about empowering employees and team building. “If there’s a group of five employees that go to Nepal, what they bring back after that trip will spread way beyond just those five people.”

Related: How to Give Your Employees Real Benefits, Not Just Cheap Perks

Mercier further expanded on what on how she’s rolled out the new program and provided some tips for how you can build something similar at your company.

1. Find the right partner.

“When [you’re] coming up with the program, [have] a really good partner,” Mercier says. For Experticity, that meant finding a company that holds similar core values. Experticity partnered with Choice Humanitarian, which books flights and provides documentation requirements.

2. Listen to employees.

Don’t make the decisions alone — work with the entire company to decide on certain aspects of the program.

“We had the whole company (more than 240 employees) vote on five different causes to support and it was a pretty overwhelming vote — they wanted to choose clean water because it has so many implications in people’s lives,” Mercier says. “And then we chose five different groups that supported clean water around the world and rolled out the program.”

Related: This Is the One Simple Thing Employees Really Want

3. Pursue programs that align with your company.

“Many of our employees are very passionate about giving back and making the world a better place,” Mercier says. “This is a really unique way to give to our employees and fuel their passion for giving back to the world and building camaraderie.”

Your success as an entrepreneur is often measured by how fast you grow. This is especially true in the world of venture-backed startups where the predominant attitude is the faster, the better. Your ability to grow fast is how you’ll be judged by your investors, your employees, the people you’re trying to hire, your competitors and the media.

In fact, the need for speed can sometimes become an obsession, especially for Silicon Valley entrepreneurs. You hire, expand and raise capital as quickly as possible. You iterate and innovate as fast as you can.

Growing fast, even at a breakneck pace, is how you become the next star of the startup world, the next Snapchat, Blue Apron or Facebook. This was even reflected in Facebook’s famous mantra — “Move Fast and Break Things” — although Mark Zuckerberg has said publicly that Facebook is backing away from that slogan.

Fast growth is certainly not foreign to me as a startup entrepreneur. I started BlueVine, which offers working capital to small and medium-sized businesses, in July 2013. A few months ago we published an infographic illustrating how we’ve grown in the last four years. It features an exciting image — a hockey stick graph, demonstrating a sharp rise in the volume of working capital we’ve funded since we began.

That certainly makes us and our investors happy and proud. But there’s one important lesson I’ve learned as an entrepreneur. In fintech, growing too fast can be dangerous. In some cases, it can even be fatal. In fintech, the need for speed must always be weighed against the importance of smart and sustainable growth.

Related: ‘Slow and Steady’ Won’t Win Your Company Growth, But This Method Will

Do we want to grow 100 percent to 200 percent year over year? Yes, we do. Do we want to grow more than 300 percent in a single year? Only if we can be sure that we’re on a path of smart, controlled growth. Otherwise, the answer is no. That’s too fast for us. That type of growth would actually make me — and our investors — nervous. I suspect other fintech entrepreneurs share my perspective, primarily those in the lending sector.

Through technology and data science, fintech companies are dramatically changing the way people, businesses and institutions access and manage their finances. For small business owners who have grown frustrated with slow processing times and the stringent requirements imposed by banks, a company like ours means fast and convenient ways to obtain capital.

But while we’re disrupting an industry long dominated by banks, fintech startups can’t exactly be like other tech companies either. We clearly can and do move faster than banks, but we can’t solely optimize for fast growth.

For fintech companies, three factors must always be front and center — data security, risk management and compliance. While we strive for speed and innovation, we can’t afford to completely embrace Facebook’s “Move Fast and Break Things” mantra.

Related: What Fintech Entrepreneurs Can Learn From Big Tech Companies

We are dealing with extremely sensitive private and financial information, and our customers expect us to securely store, handle and maintain that information. If Facebook suffers a system glitch and loses some of my photographs, I’d surely be upset. But that’s not the same as a fintech company “misplacing” $200,000 of my money. We can’t just tell a customer, “Oh, sorry, we miscalculated your balance. But no big deal.”

In addition, the arena we’re operating in has strict rules and regulations meant to protect consumers and small business owners. You cannot overlook regulatory or legal licensing requirements because they seem unnecessary or burdensome to you.  In fintech, moving too fast and breaking things can land you in big trouble.

That’s what happened with Square, the mobile payments company, which got hit with a hefty fine in Florida for operating without a money transmission license.

Caution is critical for fintech lenders for another reason. While you want to grow your customer base and originations as fast as you can, you want to make sure most of the money you’re lending actually comes back. Giving away money is easy. Deciding who to give it to and making sure you get it back is the challenging part.

Of course, losses due to bad loans are a fact of life for financing companies. You inevitably encounter borrowers who cannot or will not pay you back. In fact, I found this out shortly after launching BlueVine in 2013. As I recalled in an earlier column, nearly every other customer in our first month defaulted. Early on, higher losses are an acceptable “tuition.” However, as you scale, you cannot afford to rack up excessive losses.

Related: Why Fintech Startups Need Smart Analytics

Managing credit risk is a core competency for fintech lenders and doing well requires discipline. Loosening underwriting standards in attempt to grow faster can severely derail a financing company as the recent turmoil in lending start-ups underscore. CAN Capital and CircleBack Lending were forced to stop issuing loans due to mounting losses. Funding Circle also dramatically scaled back its lending at one point due to higher-than-expected losses.

Our margin of error is small. We always need to think before we act. When you grow too fast, you lose control. In fintech, you cannot afford to lose control.

When Sean Conlon decided he wanted to become a real estate agent, he had no official position or clients. He worked as a night janitor. But, what he had was a drive to succeed — a drive that stems from his Irish heritage, which pushed him to make cold calls every day for six months before he made his first sale. It was only for $20,000, but it was an important moment for Conlon.

Years later, Conlon has used that drive to build an empire, selling $200 million worth of real estate annually.

In this video, Entrepreneur Network partner Patrick Bet-David sits down with Conlon to learn more about his process, his drive and his vision.

Related: Why Your ‘Great Idea’ Actually Sucks

Entrepreneur Network is a premium video network providing entertainment, education and inspiration from successful entrepreneurs and thought leaders. We provide expertise and opportunities to accelerate brand growth and effectively monetize video and audio content distributed across all digital platforms for the business genre.

EN is partnered with hundreds of top YouTube channels in the business vertical. Watch video from our network partners on demand on Amazon Fire, Roku, Apple TV and the Entrepreneur App available on iOS and Android devices.

Click here to become a part of this growing video network.

Many companies use incentives such as bonuses and equity to boost employee engagement and satisfaction. However, this might be the wrong approach, according to a new study.

Related: Money Is Nice, But It’s Not Enough to Motivate Employees

A study by The Harvard Business Review examined how incentive pay affects employee well-being, job satisfaction, organizational commitment and more. By interviewing senior managers at companies across the U.K. and gathering data from employees at these companies, the study found that profit-related pay, where employee compensation is related to the profits of the company, did not have positive effects. To the contrary, some employees felt less committed to the company and their work. That’s because organization-wide incentives such as profit-related pay can often depend on an employee’s status in a company and are not equitably distributed.

Related: Employee Motivation Has to Be More Than ‘a Pat on the Back’

Money doesn’t motivate people outside the office either. A recent report by Case Western Reserve University studied how often new gym members regularly visited the gym, even when they were given monetary incentives. At the beginning of the study, it was the intention of new members to go to the gym three times a week, but most ended up going an average of 1.5 times per week.

In the six-week study, participants who visited the gym nine times — approximately 1.5 times per week — were promised a reward, which would be either an Amazon gift card or an item such as a blender or an item of equal value. At the onset of the study, each participant was told their specific reward. The researchers created a control group, where participants received $30 Amazon gift cards regardless of how often they went to the gym throughout the six weeks.

Related: 3 Methods Science Recommends for Motivating Employees

It turns out, even when people were paid to exercise, they still weren’t motivated to hop on the treadmill. In fact, those promised the $60 gift card did not visit the gym much more than those who were simply handed the $30 gift cards (regardless of whether they went to the gym). It wasn’t until the final week of the study, when people had their last chance to win a prize, that gym visits increased ever so slightly by a low 0.14 more visits per week.

So how can you motivate your employees? Rather than using pay, more effective ways to motivate employees are providing constructive feedback, fostering a collaborative work environment and connecting with employees to show you care.

Introducing our new podcast, Problem Solvers with Jason Feifer, which features business owners and CEOs who went through a crippling business problem and came out the other side happy, wealthy, and growing. Feifer, Entrepreneur magazine’s editor in chief, pulls these stories out so other business can avoid the same hardships. Listen below.

Here at the magazine, I’m always getting pitched new companies calling themselves “the Uber of” this or that. The Uber of lawn care, the Uber of bespoke suits. And I have to admit, most of the time I’m skeptical that a company like this will survive. That’s because they’re all going to face a problem called “disintermediation” — or what I like to call the Handy Problem. Few of them seem to have a solution.

Handy is like the Uber of house cleaners. You sign up, and it’ll send someone to clean your home. My wife and I used the service a few years ago when we had a baby and no longer had time to clean our apartment ourselves. We were pretty happy with the result. A different cleaner would show up every time, and some were better than others, but they all basically got the job done. And then one day, a cleaner came, did a great job, and, before she left, she handed us her business card and said that if we hired her directly rather than through Handy, she’d give us a better price.

Related: 22 Qualities That Make a Great Leader

That’s a good business strategy for her, right? After all, when she’s booked through Handy, the company takes a cut of her fee. If she books directly with us, she doesn’t lose that cut and can give us a part of it and still make more money. It’s less expensive for us, and more money for her. And frankly, because we liked her work, we’d like to build a relationship directly with her. In this equation, neither side was incentivized to keep doing business with Handy. We canceled our membership with the company, and have been using this same cleaning woman for years.

Almost every company calling itself the Uber of something will face this problem. These companies are connectors — they create a large pool of people who are offering the same service, then attract customers looking for that service, and just put them together. But how do you stay relevant once the connection is made? How do you be the kind of company people keep wanting to use?

Related:Inspiring Quotes to Help You Get Through Your Work Day

Jaron Gilinsky figured it out. He’s the Jaron founder and CEO of Storyhunter, a platform that connects media companies and giant brands to freelance video producers and journalists in 180 countries. How’d he do it? That’s what this episode of Problem Solvers about.

To subscribe on iTunes, click here. Or, click play to listen below.

Flying private is a growing phenomenon, largely thanks to social media and iconic figures flying lavishly across the globe.

Some fly private for comfort or luxury. Others use it to bypass TSA or avoid hasty cancellations. As a busy executive, you can conveniently visit multiple cities.

Given the mystique about flying private and the numerous options when googling “private jet charter,” we asked Moshe Malamud, founder and CEO of M2Jets, for his best advice.

After flying private for more than 15 years, Malamud established a successful on-demand charter service in 2010. Now, Malamud—who owns several aircraft—shares seven essential tips if you’re thinking about making the leap.

1. Time the best deal.

Unlike commercial airlines, private planes are constantly moving across the world at a moment’s notice, Malamud explains. Although the price fluctuates, you could snag last-minute deals, understanding that aircraft operators want their planes in the air as much as possible. “The best deal is often available by booking a trip one to two weeks in advance,” he advises.

2. Don’t price shop.

Finding a great charter deal isn’t like bargain hunting on eBay. Clients tend to get themselves in a bind when cross-shopping with multiple operators or brokers. “It’s tough negotiating with the operator of a plane when other companies are calling him to charter the same aircraft for you,” cautions Malamud.

3. ‘Empty legs’ aren’t what they seem.

Since the rise of membership-based companies like Jet Smarter, Surf Air, and Jet Quote, “empty legs” are becoming more well-known. This is when a plane flies to one destination with passengers, but returns empty.

Certainly, you could snag a bargain on an empty-leg flight, but Malamud warns: “You have about a 2 percent chance of finding an empty leg for the exact time, day, and destination you need. And they’re never free.”

4. Have realistic expectations.

In the last decade, private travel has become highly competitive, pushing down the price for consumers. But flying private is still flying private. A basic light jet typically starts from $2,000 to $2,500 per hour, with your heaviest plane, like a Gulfstream or Global, ranging between $6,000 and $8,000 per hour.

“If you decide to step into the “1 percent” world, understand that chartering privately is a luxury expense—it’s left to the 1 percent for a reason,” Malamud cautions.

Owning, maintaining, and placing a flight crew on these toys is expensive. If you can’t afford it, fly commercial or try a shared jet option.”

5. You get what you pay for.

You wouldn’t walk into a Rolls Royce dealership and barter for a $300,000 car. When flying private, you’re paying for convenience, safety, security, and luxury.

But if you can afford it, paying the right price to be on a safe and secure aircraft is well worth it.

“A brand new car is more expensive but requires almost no maintenance. It’s the same with jets: older ones require more maintenance to meet strict FAA requirements,” Malamud advises. “That’s why we direct clients to newer, better-managed aircraft. Paying a better price for an old, outdated plane is risky.”

6. Don’t waste your money on jet cards.

A jet card provides access to private planes for a flat fee, usually for a set number of hours. Owning a jet card was once a status symbol: you were a member of an exclusive club that could have a plane available within hours, without owning it.

However, with the expanded availability of private aircraft and a good broker network, it’s cheaper to use pay-as-you-go charter services.

7. Know when to book a round trip or one-way.

If you’re chartering a plane with two to three overnight stopovers, it’s better to book a round trip. But if you’re staying for an extended period, you can’t expect an operator to have the plane sitting and waiting for you.

“Overnight stays bring significant expenses,” explains Malamud, citing ramp fees, crew expenses, and lost revenue from planes not flying. A good operator or broker should be able to find suitable one-way options that may be less expensive than a round trip and more economical if you have many overnights.

The Mooch is out.

After only 10 days on the job, President Donald Trump has fired Anthony Scaramucci as White House communications director, The New York Times reports. The decision apparently came from newly appointed White House Chief of Staff John F. Kelly, a retired United States Marine Corps general who had worked at the Department of Homeland Security.

Scaramucci’s firing goes to show that being overconfident in your abilities and your position — the millionaire Mooch bragged that he reported directly to the president, not the chief of staff — can doom you from get-go. And, oh yeah, publicly disparaging your co-workers certainly doesn’t help.

Related: 9 Inspirational Donald Trump Quotes to Make You a Fearless Risk Taker

The now former communications director let loose a profanity-laced tirade against other White House staffers, including former chief of staff Reince Priebus and advisor Steve Bannon, to a reporter at the New Yorker. Among his many mistakes, Scaramucci did not specify whether the conversation was on or off the record.

“Let me tell you something about myself,” Scaramucci said while appearing on CNN. “I am a straight shooter.”

Look, Mooch, you’re certainly entertaining and no one can say you don’t bring a lot of energy to the table, but maybe in your next position, dial it back a little.

The jury is still out on whether copying your boss is a good idea.

A topic that is often, if not altogether, missed in my entrepreneurship reading is what to do when things go wrong, particularly when you are the one who made the big mistake.

Those who know me well know that I have made mistakes in business and in life. I am grateful for those learning opportunities, and now that I am on the other side, I can’t help but remember the sense of dread that I have brought myself on more than one occasion.

If you find yourself in the midst of a catastrophe or cannot find your way out of a problem, I have three tips for controlling the damage.

Tip #1: Communicate bad news with your stakeholders early and often.

My husband and I spend many family meetings coming clean about something we have done that we aren’t proud of. We’ve set aside Sunday nights for this very purpose (and to remind one another of our love, of course). Practicing difficult conversations on a weekly basis at home has taught me that it is better to rip off the bandaid than prolong the inevitable and that there is a formula for difficult conversations.

In the worst of times, it is best to communicate mistakes made as soon as humanly possible to every stakeholder that your mistake will affect. In a business setting, this includes your board, investors, partners and employees. In difficult environments, trust among your team is most important, and trust is built upon transparency. Those closest to your situation can only support you and move through the problem if they are armed with all of the facts, even if this burns bridges temporarily.

A friend and coach, Reid Mihalko, has shared the following formula for having a difficult conversation:

• Make an appointment with the person for a time in the near future and tell them that you need to share difficult news.  This allows the recipient to prepare themselves for a difficult conversation.
• When your appointment has arrived, first remind them that you have difficult news to share.
• Tell them your fears of what their worst reaction may be to the news.
• Share how you hope they will receive the information and react. This gives the recipient the opportunity to weigh their options prior to hearing information that may inflame their anger. It also allows you the opportunity to ask for their understanding and support.
• Tell them about the mistake you have made.

You will find that your recipient will react with more thought and care for you and the situation if you present them with the information honestly and with respect for their feelings.

Tip #2: Avoid the press at all costs.

As a public relations magnet, I have never met a reporter, stage or story I didn’t like…until I screwed up. When I made a mistake in my business, the press had a field day with me, triggering me to want to defend myself.  

In these instances, I have been coached time and time again to remain silent.

If your mistake will likely result in legal action or criminal or civil liability, any good attorney will tell you to remain silent to protect your fifth amendment privilege against self-incrimination. How quickly we forget this good advice for the lesser mistakes in life.

The press can be vicious, and on a slow news week, your business failure could result in some salacious reading material. It will feel unfair that your side of the story isn’t being told — that you are being painted by the press in a way that is completely outside of the truth.  

Although this may feel like it is going against everything you stand for, I encourage you to stand down. Do not take the bait.  

Your stakeholders matter and you have already shared the news with them. The rest of the world is better off hearing about your next success after this hurdle. Fanning the flame will only make it more difficult to push the negative headlines down in a Google search. Sometimes less news is good news.

Tip #3:  Forgive yourself and move on.

Upon making a mistake, it is important to take ownership for your actions and express remorse for the impact that your decision had upon those you’ve affected. This is absolutely necessary if you are ever to win the trust of your team again.

However, there comes a time after a mistake when you must move on. Many venture investors have shared that, when a founder fails in their portfolio, they work to re-patriate that founder into a new business, project or concept as quickly as possible, so to not lose them to their own self-shame.

Sitting with your failure for too long will only cause you to stew and fall into self-loathing and pity. Allow yourself the time you need to work through your situation and react negatively. Then, set a deadline for yourself to retire your guilt and hold yourself accountable to creating your next action plan.  

Everyone makes mistakes, and the most successful entrepreneurs are able to manage them with little public collateral damage and move on.