Expanding business rapidly? Time to talk about Acquisitions
Are you looking to grow your business?
Choosing acquisitions for growth seems to be an attractive path for most large businesses or giants like Microsoft, Facebook, Amazon, Apple or Google and is a big challenge for small businesses. These types of businesses gain market share through a clever business strategy of "continuous merger, constant acquisition".
Because sometimes acquisition is easier than building a new one!
In Australia, however, the SME community has a more progressive outlook on these mergers and acquisitions. Enterprises have thousands of reasons to invest "buy", but the first and the most important reason is "growth", from the psychology of building and buying. Actually, through acquisitions, the path of business development has been greatly shortened. From any angle, this strategy brings extremely good benefits and is the driving force for development. Whether it's highly skilled engineers, or growing market share, or the exponentially growing patents for services and products, many giants are captivated.
And from these studies, SMEs have learned the lessons that most businesses are willing to take over another business, but only 5% are actively pursuing it, compared with the $33 growing market. their current school.
The Benefits of a Business Acquisition Strategy
Either way, the cost of growth is not cheap.
If you choose to grow your business in natural ways, you'll inevitably be tied to the overall growth structure of companies: startups, small businesses, sustainable businesses, followed by entrepreneurship. profitable. It is all based on your company's revenue, which will then experience fluctuations and changes to the liking of the market.
Although natural growth is considered safer in two ways, it still requires innovation, creativity, market acumen and the ability to penetrate many different markets, not to mention the risks encountered when wanting to scale. You're using your hard-earned money to reinvest and gain more market share in your business. Sure, no one is sure this will make your business successful. On the more positive side, however, you can choose and pursue a strategic business acquisition.
If you choose to grow your business naturally, you are tied to the structured growth of the startup, small business, sustainable business, then profitable business, all based on business. Your earnings, as well as according to market preferences and volatility.
Is this problem really smart?
Let's say your company has annual sales of $ 10 million and then you choose to acquire another company that has $ 10 million in annual sales. So you've helped your business to double its size overnight, and you get a host of other advantages:
- Rapidly expanding into new markets
- Economical by scale
- Easier access to finance
- Acquire skills, talent, or technology faster and at a lower cost
- Improved pricing and exit options - companies with diverse sales and customer channels will be more attractive to potential buyers.
The potential for strong growth from acquisitions can be seen clearly. But despite being widely shared, only large corporations, giant enterprises, who regularly use M&A, choose to acquire for development. Small and medium businesses still have a lot of opportunities to participate in this game.
How can SMEs achieve success in acquisitions?
To acquire a business, it is important to clarify the following 4 factors that represent the 4 stages you need to complete.
1. Clarify business strategy
If a buyback or acquisition is part of your growth strategy, take a closer look at your revenue and EBITDA goals. As analyzed above, acquisitions open up for a business many opportunities for growth, not merely changing its financial aspect. Understand the business itself, its future goals, its long-term vision.
2. Market mapping
Building a trading strategy is like doing your homework in the marketplace. When you begin to clearly and clearly divide each person's role in each horizontal and vertical channel and clearly show each of your future goals in it. You would be in a better position to visualize where your business fits in and its natural growth.
3. Attract your goals
Once you have the right information about the target market and assess the future of networking, your business is ready to get involved in some good future business. It is necessary that a mentor or middleman can run this expansion process, they will have a highly specialized team, a standardized process ready to deal with, evaluate what helps to attract goals. Stop all the physical work to focus on future developments, call for investment and attract them.
4. Negotiate the agreement
The first step in this phase is application and acceptance, followed by appraisal. Since this can be a challenging period, it is important to speak with the right advisors. They will reduce risks, navigate confrontational challenges in negotiations and help you move into the transition in a positive way.
Have you thought about an acquisition strategy to boost your growth