When sales drop, it hurts. Your business size really doesn’t matter. You can be a high-flying dot com business, a monster conglomerate, or a mom and pop candy store; but when customers stop buying, you start looking around for something that keeps you going until confidence in our economy once again arrives. We offer dozens of FREE tips on www.tulenko.com you can use, and you can always ask us for specific help, also free.

One idea worth examining is the possibility of merging with another firm as an effective means of not just surviving the latest crunch, but with the idea of combining functions to grow both businesses. It’s not the purpose of this column to help you make the actual decision, nor can we suggest which firms would be great merger targets for your business; that’s your job. What we can do is suggest some guidelines for making the merger work.

Mergers entail considerable restructuring of both businesses, eliminating some positions and causing major changes in many others. A major concern is how to accomplish your respective goals without losing your more valuable employees and still more valuable customers. Unions complicate the transactions only in that you will need to involve them as part of your restructuring team, so see your attorney first. Here are a few ideas which may be of some help in the overall move.

SECRECY
Begin with the attorneys. Don’t talk with anyone, inside or outside of your organization, without a signed legally valid confidentiality agreement; not even your most-trusted staff member. Rumors can destroy everything you are working for, and once the word is out, the rats will abandon your ship. You will be talking with other firms about merger possibilities, but neither you nor they will benefit at even the hint of a proposed change. Form a very small transition study team, and stress secrecy. Pay attention to the smallest of potential leaks, such as spoiled copies in the trash, memos on desks, and secretarial notes.

NOTIFY KEY PLAYERS
Bring your key players into the game early. You can’t make a merger work without the cooperation of your winners and keepers. This is especially true if unions are involved. There is no guarantee, but making them part of the solution may keep them from being part of the problem.

HIRE A PR FIRM
It would be nice if there were no leaks, but once the word is out, you will need to defuse the concerns and complaints of everyone. It is the task of a PR firm to explain how your new plan is designed to improve the lot of customers, shareholders, and employees. You cannot do this! It takes an expert, so hire one! Work closely with your PR firm, telling them everything, and let them do the work.

DON’T EXPLAIN FAILURE
Don't waste your energy trying to explain what happened, why the old system didn’t work, or why the economy did this or that and caused business to go sour; everyone already knows those facts no matter how hard you’ve tried to cover. Your approach should focus on how the new merger will change the entire direction of your firm and make things better for everyone. Your task is to show how the new system will allow employees to gain in position, prestige, or pay; and how the customers will gain in higher quality products and services at a better price point.

TRANSFER BEFORE TERMINATE
The new firm will need new employees with new skills. If at all possible, transfer present employees within the structure. You’d be surprised at how flexible people can be when their livelihood is at stake! Begin with new job descriptions, the offer training programs to employees who want to switch. Normal attrition will thin the ranks, but even if terminations are required, they can be spread out over a longer term, thereby lessening their impact.

HIRE A HATCHET
Somewhere down the line you are going to have to terminate people and their pet projects. One of the smart things you can do is hire a Transition Manager to whom you give the termination instructions. This individual will cheerfully absorb the brunt of the flack, and if your attorneys word the contract correctly, will leave when the transition is completed. There are people out there who do this for a living, so hunt for one.

MERGE EXISTING PROGRAMS
There are programs, divisions, groups that you don’t want to lose at first because they are profitable, but your analysts project the need to be less in the new firm. Rather than terminate the program, consider adopting it into a new program where it can be phased out over a period of time.

PAY-OFF THE NEGATIVES
Without a doubt you will have a major player in your firm who feels so threatened by the change he or she will fight tooth and nail against the new structure. A financial severance package may be the least expensive way to deal with this problem. You will never benefit by trying to convert a non-player. It’s a lose-lose proposition.

SUCCESS
The above are not the only rules of mergers (as your attorneys will cheerfully tell you), but they are extremely important for your success.

(NOTE TO EDITORS: PLEASE INCLUDE THE FOLLOWING.)
Paul Tulenko is a Small Business Success Consultant based in New Mexico. Additional tips and suggestions are available at www.tulenko.com or call (toll-free) 1-866-TULENKO.