It may sound like a corporate buzzword, but a synergy in business is actually an important concept for businesses in the process of being merged with another entity. In essence, the definition of synergy is a potential benefit achieved by combining the value and performance of two entities.
Synergies often represent:
In the end, synergies in business are any perceived change that will occur when two businesses are joined. These changes are largely positive, but can also be negative, and will often have a lasting impact on the future growth and performance of the new amalgamated business.
Want to learn more about synergy in business? Nash Advisory can let you know exactly what your business will gain for a merger or acquisition. For expert business advice, contact us on [phone].
The list of synergies available to buyers is endless, and will largely depend on the businesses and the industry in question. Here are a few that we commonly discover over the course of buying and selling businesses for our clients.
Revenue synergy can help existing businesses galvanise their sales and revenue by scaling up their business. The acquisition of a new company offers existing businesses plenty of scope to add value by accessing new customers, expanding product lines, and growing their brand in new markets.
Here are the most common revenue synergies that new business can inherit from an acquisition:
Expense synergies are usually geared towards finding savings. Whether these savings are found through expansion or by harnessing economies of scale, the merger of two businesses should yield plenty of opportunities for synergy, again depending on the industry.
Some of the most common expense synergies include:
Companies at all stages need their own specific departments. Once two businesses merge, these departments do not need to be doubled up, and can be often be amalgamated or dissolved, leading to cost savings as the business grows as one entity.
Some key management synergies in business include:
At Nash Advisory, we take to time to find synergies that may not be immediately apparent. By taking a holistic view of your business in preparation for sale, we are able to identify left-of-field synergies that will appeal to a range of interested buyers.
Here are some left-of-field synergies that may present themselves over the course of a sale:
There are a myriad of potential synergies in a given transaction. In order to raise the value of your business, Nash Advisory delves deep into the details to craft a story and messaging to buyers. Once we engage with buyers, we undertake further research on their business in order to communicate the identified synergies.
This data collation and communication with buyers can increase their appetite for a transaction, and ultimately the sale price for your business. If you'd like to learn more about how we go about selling your business at the best price, contact Nash Advisory.