#Immediacy on speech making

You may be wondering what all this has to do with new ...

You may be wondering what all this has to do with new products or services in your business. The answer is simply that, whether they know the word or not, synergy is the reason many entrepreneurs seize upon to justify a new project.

They convince themselves that, with their existing business sharing all the overheads, they will make a killing with the new venture. Unfortunately, experience with such ventures is often much the same as with takeovers and mergers disillusion. Synergy is not a myth but its existence or otherwise in a particular proposition can only be checked at the nitty-gritty level.

The broad-brush approach is not enough.

Since this is the typical approach of merchant bankers and the boards of large companies, it explains why so many mergers and takeovers disappoint the participants. The owners of small businesses spend much of their time dealing with the nitty-gritty, and so have less excuse for error. But they can still be carried away, as Andre's story reveals.

Andre's cautionary tale Last year I had a chain of four baker's shops, supplied from a central bake-house.

I had just lost the contract for a lucrative business supplying a chain of pubs with bread and rolls when one day I got a mobile phone call from a Jeremy Hampton, who described himself as a business-transfer agent, inviting me, to lunch. After an excellent lunch, he asked if I were interested in buying a similar business about thirty kilometres away three shops and a separate bake-house. 'The owner was retiring and in recent years had let the business run down. He showed me some figures which indicated that the turnover and net profit were poor by my standards.

He left these with me and arranged to pick me up the next day and take me round. I met the owner, an elderly, very dispirited-looking individual.

The shops badly needed redecorating, the bake-house was decrepit and its equipment ready to be scrapped Because of the condition of the business, the asking price was low.

I reckoned I could close down '-the bake-house, saving quite a bit of cost, and supply the shops from the spare capacity in my own bake-house.

Even allowing for redecorating the shops, it looked an attractive proposition, especially if I could get the turnover per shop up to my own level. My solicitor and accountant saw no snags so I hurriedly concluded the deal before someone else did. Then the troubles started.

The product mix for the new shops was different from the pub ...

The product mix for the new shops was different from the pub contract and some-days I couldn't make enough pastries. One shop needed much more... read more

But it is easier to fool yourself in such a case, when ...

But it is easier to fool yourself in such a case, when you know much less about one of the businesses. While the presence of synergy can make a project more attract... read more

Sometimes you knowingly adopt an expensive method because it is the only ...

Sometimes you knowingly adopt an expensive method because it is the only way to get the job done in time; next time