Mergers are complicated because it is about bringing two separate entities into one large business. Both companies have to bring their business savvy, financial knowledge and negotiation skills to the table. Oftentimes, their ideas will conflict.

Mergers rely on a grueling process of negotiations, compromises and discussion between business representatives. After negotiations are finalized, representatives have to guide a smooth transition for employees of both businesses. Here are a few tips to manage a successful merger.

Preparation is mandatory

Mergers happen for a variety of reasons. Regardless of the circumstance, each business needs to be fully prepared for the questions, concerns and negotiations that will occur. Before meetings begin, business owners should thoroughly evaluate their financial status and consult with a legal expert about the best action for the business.

After you understand the current status of your business, put together a strong team of representatives who will advocate on your business’ behalf. Whether you are trying to acquire another business or sell your business, you should act in your own company’s interest. A team should include lawyers, valuation experts, bankers and accountants.

Put together a Non-Disclosure Agreement

Non-disclosure agreements (NDA) are an appropriate step as merger talks begin. If you are in early talks with a potential acquirer or target, ask them to sign an NDA to protect your business and also stop any attempts to solicit your employees. If your business is acquiring another company, you will want to protect your own information that may be revealed during discussions.

Establish goals for negotiations

A grueling process during most mergers is the negotiation phase. Business owners on both sides need to consider not only economics but also risks, logistics, and future goals. It is crucial for a buyer or seller to establish clear goals for the discussion process.

Once basic terms are agreed in principal or set out in a letter of intent or term sheet, one party will draft a merger agreement or purchase and sale agreement. This often comes from the buyer’s counsel and includes all specifics relating to the transction. information like price, terms and any special provisions. Depending on personalities, specific situations, goals and economics, negotiations over the documents for the transaction can sometimes be difficult and lengthy, other times the process is relatively smooth.

Recruit strong leaders for the transition

As you near the end of negotiations on the documents, it’s time to plan out the change for employees in both companies. A smooth transition needs strong leaders who fully understand the vision of the merger or acquisition and how each position plays into that vision.

For example, if two law firms merge, the firms need to decide how to align the differences between their paths for associates to become partners.

Regardless of the businesses involved, leaders should establish clear expectations for the transition while maintaining adaptability as the environment evolves. Those managing a merger should maintain flexibility as they navigate the process.