Post-Transaction: What is a 100-Day Plan?

A statistic commonly shared in our industry is that between 70 and 80 percent of all mergers and acquisitions fall short of delivering anticipated value. This isn’t necessarily because they were a bad fit or because the transaction negotiations were subpar. Rather, most experts would say that this value is lost in the first 100 days post-transaction when the two entities come together for the first time.

For that reason, most of the companies we support start working on a “100-day plan” before closing. The first 100 days, or roughly three months, after a transaction, are pivotal for setting the pace of change, getting key progress indicators (KPIs) in place, and establishing relationships with leadership.

Here are the components of a 100-day plan that we typically recommend:

Cost analysis – During the pre-transaction due diligence process, the buyer already analyzed the seller’s cash flow. The 100-day plan should include a deep dive into the new entity’s spending using that information. How do things change? Where can efficiencies be made? What issues need to be addressed most urgently?

Market analysis – Again, much earlier in the transaction process, both sides of the table likely completed a market analysis to understand the existing landscape and identify if the transaction made strategic sense. As part of the 100-day plan, leadership should update that picture from the perspective of the new organization. Where does it fit into the landscape now? A classic SWOT analysis is often used here. What are the new organization’s strengths in the marketplace? Weakness? Opportunities? Threats?

Strategy for delivering value – If the goal of every M&A transaction is to deliver value, then in the clearest terms possible, what is the strategy for meeting that goal after closing? It is normal for the strategy to have multiple components, but we always recommend keeping each as clear and easy to understand as possible. The time immediately after a closing often feels turbulent to both affected leadership and employees. A clear strategy and direction help immensely.

Roadmap for accomplishing the strategy – After painting a clear picture of the new organization’s cash flow and market landscape and identifying how the new organization will deliver value, it is time to draw a map for getting through the first 100 days. This is where specific details are key. You know the starting place – what metrics and targets need to be hit to reach your destination? How will you evaluate progress along the way? And when inevitable bumps appear in the road, what is the plan to address them and course correct?

If both the buyer and seller start out with a clear understanding of why their transaction is a good idea (i.e., how it drives value) and a rigorous due diligence process, then writing the 100-day post-transaction plan is much easier. Buy-in from key stakeholders and leaders is critical. Keeping everyone on the same page with a clear plan is the best way to capture value during those early days when too many transactions get off track.

If you are considering selling your business, please contact us for a confidential discussion of your specific situation. We have experience helping business owners across a variety of industries sell their businesses and relationships with buyers who are interested in new opportunities.