It often starts with what Esther Tromp calls a "gnawing thought": where am I now in the development of my company? Is it time for an acquisition, or should I be looking at a party to take us over? And am I quite ready for that? The moment those thoughts creep in, you know it's time for a thorough analysis of your business. Tromps FIRM/WARE has successfully guided acquisitions for years, but now, thanks to a partnership with Holland Innovative, can add a dimension to that.
The importance of analysis
Many companies underestimate the importance of such an analysis, Tromp knows from her years of experience. "Just look at the success rate of takeovers for that: three-quarters fail. And you can blame that largely on the lack of substantive analysis. Such a study is most effective if it takes place well before the time of the actual acquisition, which is why it is actually a subject that should concern all entrepreneurs."
However, that is not the case. For most companies, the subject only really comes up when the situation is precarious: the moment when an acquisition is necessary for the continuity of the company. "And that applies both to companies looking to expand and those looking for a party to be acquired by." To create awareness around this topic, FIRM/WARE regularly organizes events and lectures. "But actually you would like that awareness to already be there naturally, which is why I take every opportunity to raise awareness of its importance."
FIRM/WARE is focused on acquisition consulting for SMEs in the broadest sense. "Our dream client is the entrepreneur with whom it starts to gnaw. Who starts to wonder if he or she is ready for the next phase. Ideally, there should be roughly five years to prepare properly, but in fairness, the situation is usually a bit more acute. Either way, we make the best use of the time there is by making the intrinsic value of the business visible and exploring the hidden talent and untapped territory. The more time there is, the greater the opportunity to fix the downsides and remove the biggest deal-breakers."
Various areas of expertise are needed in that process; much of it FIRM/WARE has in-house, but sometimes the company calls on outside experts. This is also how Holland Innovative came into the picture, says Tromp. "The first contact was very purposeful. I saw a post by Holland Innovative on Linkedin, responded to it and the same day I was talking to them. I must say: they do have a good sense of relationship management there!"
According to Henk van Haren, senior director of Product & Process Development at Holland Innovative, the mutual interest was not surprising either. "We may have less understanding of acquisition processes, but all the more of what it takes for a company to function optimally organizationally and technically. We have developed various tools to secure long-term value creation. Companies come to us to learn that in our academy, or to be helped by our project managers when a problem has already been identified. This ensures that we have very good insight into what works and what doesn't; the physics of failure, reliability design, but also more general principles of process management: we can quickly see for high-tech companies what is needed for optimal operations."
Precisely that knowledge, in turn, is useful to Tromp in the trajectories she goes through with her clients. "Unfortunately, most entrepreneurs are still overwhelmed by a takeover wish. In that context, I see Holland Innovative's contribution being essential for that phase of its existence. Because don't forget: this is a life event for which you also have to prepare yourself very well mentally."
Van Haren sees two ways Holland Innovative can contribute to acquisition processes. "We can mean something for both the short and the long term. On the one hand, we can perform a company audit: we then know within a week where the company stands and what is broadly needed to be ready for the next step. On the other hand, we can do a more in-depth "gap analysis. For this you have to think of a lead time of three to six months, possibly followed by a longer executive process with project support from our side."
According to Van Haren, it's about giving clients a timeline to drive value creation. "Think of things like better processes, greater reliability, and more clout. That way, for example, a company can grow to a position where they are less dependent on the founder. In any acquisition process, that always turns out to be a complicated factor."
At the bottom line, it's always about very consciously and consistently linking all business decisions and processes to whether they are going to help with a potential acquisition. Tromp: "For many start-ups, that's a primary reflex of the founder; they naturally work toward their exit. But in SMEs and large family businesses, it's different. Those are often primarily concerned with the intrinsic value of their products. That's super important too, but because of this they lose sight of other opportunities."
Do you also have a "nagging thought"? Or does this article make you think it would be a good idea to open up to it? If so, contact Irene van den Graven directly.