Tips for directors – business expansion
Why do you want to expand?
Establish the reasons behind your company’s expansion and the benefits which the process should bring. This will help you with making decisions in the next steps. For example, is it to take over particular clients you have always wanted or maybe you wish to become a market leader? Is your aim to increase the value of your business for the future sell-off? Perhaps you want to gain the necessary knowledge valued in your sector or change your company’s core capabilities? Or maybe to gain intellectual property rights to a product?
Do a proper market research. Check what companies are currently operating in the areas of your interest. Get as much information about them as possible, including their clients, employees, organisational culture and plans for the future.
Out of the prospect companies select the ones which best fit to your organisation’s culture, strategic goals, products and services so that the whole transition process is as quick and smooth as possible and brings the expected growth of your business.
What is the best option for expansion?
Based on your selection of possible target companies, establish how you can get them work for you. Is it by acquisition, merger, joint venture or other form of business expansion?
Calculate all the costs involved
Work out how much money you will need to secure the transaction and how much it will cost you to implement all the necessary changes into your new business. Consider also employment costs as you might have to make some of your existing and new employees redundant, or appoint or promote them. Do benefits exceed the cost?
Proper document preparation
This will often require appointing an outsourced commercial law specialist who will prepare the transactional documents and ensure that the process is legally valid and compliant with the regulations.
Depending on the method of expansion which you have chosen and terms and conditions agreed in the transactional documents, you might be obliged to provide your existing and new employees with new or amended contracts of employment. Again, they should be prepared by someone who has relevant HR experience.
We can manage the legal aspects of your business expansion. Just give us a call and advise what sort of assistance you would require.