Mergers and acquisitions are about more than determination to close a transaction. Regardless of what side of the M&A deal you’re on, SMART goals can be an advantageous way to organize and manage your objectives. While this isn’t the first time we’ve covered SMART goals, we’d like to take a closer look at their application in M&A. First, let’s get a refresher on what SMART goals are.

What are SMART Goals?

Specific

Your goal must be specific and well-thought-out to be a SMART goal. What do you need to accomplish? What steps need to be taken to complete your goal? Are you the only one responsible for it, or will you be working with a team?

Measurable

In order to effectively track your progress towards your goal, you need quantifiable data. It isn’t enough to say you want to up your sales– what percentage of increase in sales do you want to achieve? How will you scale things to reach your goal?

Achievable

It’s imperative that you set achievable goals. This is where you need to truly reflect– is your goal realistic? Don’t overload a small team or overfill your plate to attain your goals in the desired time; it’s more likely you’ll encounter issues along the way. 

Relevant

You have a goal in mind, but why are you setting this goal? How does it relate to your project or business at large?

Timely

Utilizing SMART Goals in M&A

Sellers

As a seller, your goal is going to relate to the sale of your business, but what specifically do you want to see? Are you measuring your success in sales dollars or speed of sale? How does selling your business relate to larger life goals? While these questions may be overwhelming, you should have an answer before starting the M&A process.

SMART Goal Example

I want to sell my business for at least $7 million. I will need a team of financial, legal, and M&A advisors to work with me. I want to sell within 3 years (which I know is achievable, because of the 1,000 day journey), so I can retire and spend time with family and friends. 

Buyers

Of course, as a buyer, your goal will focus on the acquisition of another company. However, the specificity of your goal will vary. Are you purchasing to boost your business’s performance? Maybe you’re attempting to exit in the future, but you want to close your value gap. Regardless, SMART goals function the same, so reflect on your desired outcome.

SMART Goal Example

I want to purchase a business for $5 million or less. I will need to consult a team of advisors, key employees, and company stakeholders. I want to acquire a business, related to my current operations, higher up on the supply chain to save on future costs within 12 months.

Even when you’re utilizing SMART goals in M&A, you shouldn’t complete your transaction alone. Reach out to Stony Hill Advisors to speak with an experienced advisor today.