It’s not how big you make it, it’s how you make it big.

Dealmakers love to make deals; perhaps it’s just how they’re wired. However, the first question to ask yourself before proceeding is, “Why do I want to do it?” Stop immediately if it’s more about the thrill of the chase, the recognition of snagging an acquisition that is newsworthy or buying something solely for the price, as in, it is simply too good a deal to pass up.

All of the above are akin to the dieter’s adage, “A moment on the lips forever on the hips.” It is much easier to gain something than to try to lose it later. This applies both to weight and to acquisitions. The business streets are littered with casualties of much-ballyhooed combinations that, in a short time, turned south and were subsequently disposed of for a fraction of the purchase price. Think of the Time Warner/AOL combination, or Quaker Oats buying Snapple for $1.7 billion, only to dump it for $300 million about two years later.

Before succumbing to temptation, any deal must undergo intense scrutiny as to its long-term benefits. When a company buys another, it’s a success only when the united organizations are much better off than standalone companies. A bolt-on acquisition might in the short term appease investors or other constituents, but on a long-term and sustained basis, an acquisition must add ongoing value. Forget about dreaming of huge synergies based more on a wing and a prayer than on stress-tested analytics and hard facts of what it will take to get the new unit up to speed.

The focus must be on the work ahead, as well as possible additional capital needed after the deal closes for integrating the old and new businesses that were not included in the original deal calculus. Equally important, don’t neglect the possible effects of the team taking its eye off the ball during the heavy lifting of the combination process that could dramatically and adversely affect the cash cow core that pays the bills.

A variety of purely noneconomic strategies for making a deal should be added to the plus column for the justification to forge ahead. Taking out a thorn-in-your-side competitor to open new avenues for growth could top any list. Maybe it’s about acquiring a superstar team that comes with the purchase that can jumpstart your business. Make sure you check all the boxes that include every aspect of the deal and take into consideration both the pros and the inevitable cons that are part of the baggage in every transaction.  

Leave the thrill of victory out of the decision mix. Never forget that the newspaper, with a front-page headline trumpeting your deal, will be used to wrap the garbage and forgotten the next day. Most deals to work get down to the concept of a simple balance sheet: The assets must always exceed the liabilities. If not, forget it.

Remember, it's not how big you make your company; it's how you make your company big for a successful long-term future.

Michael Feuer co-founded OfficeMax, and in 16 years as CEO, grew the retailer to sales of $5 billion in 1,000 stores worldwide. Today, as founder and CEO of Max-Ventures, his firm invests in and consults for retail businesses. Feuer serves on numerous boards and is a frequent national speaker and the author of business books “The Benevolent Dictator” and ”Tips from the Top.”


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