Once you have a great business with a good operating model (so you have the best people in the right places doing the right things, great sales & marketing & sound financial management) it’s time to think about how to grow.
One way to grow is organically – so investing in marketing & sales to generate greater revenues – maybe its opening new stores to increase the geographical coverage of a business for example.
The challenge I find to organic growth is that is usually really hard!
If you were going to invest £50k in marketing or £100k to open a new branch or store, why not spend that money on an acquisition.
If you buy another business you have a brand, staff, premises most importantly cashflow – even better if you can acquire the business outright and it’s a business that is struggling, then why not follow the tips in this book (and of course apply your own experience) to fix the business.
The returns can be immense.
In a startup or new business, it’s difficult to get off the ground – unlike in an existing business you need to find staff, premises, market yourself. In an existing business you have all these things even if they are not necessarily well run. You can change that.
A Merger is also another useful way to grow – when you put 2 or 3 businesses tougher that are similar the synergies can be great. Sometimes a merger you get 2+2 = 6 because you may put 2 £1m revenue business together each making £100k profit (so combined that’s £2m revenue, £200k profit). But think about it – do you need two HR departments, two finance department, could you get a better deal from your suppliers (buying power) if one business generates new customers for less than the other, you could save so much money!
Anyway, M&A is what I spend most of my time on now. If you have fixed a business and want to talk to me about how I can help you acquire or merge reach out.