A strategic acquisition can be one of the most important means of growth for your business. The key to growth through acquisitions is to take advantage of the synergies that a carefully and successfully orchestrated acquisition should yield.
Business owners often find that growth through acquisition is a faster, less expensive, and a much less risky proposition than the traditional methods of growth realized through expanded marketing and sales efforts. Unlike growth through increased market share and sales, acquisition offers a host of other advantages, including easier financing for future undertakings and immediate savings due to economies of scale.
Most businesses growing through acquisition will find a number of other competitive advantages as well, ranging from catching the competition off guard to instant market penetration. In some cases, competitors can be eliminated entirely via acquisition.
Reasons to Consider an Acquisition
As an entrepreneur, you have poured your life and energy in to growing your business to it’s current position. You may have come to the point your creativity and resources have depleted. Here are few reasons to consider an acquisition.
- Access to funds or valuable assets for new development.
- Access to new leadership and talent.
- Your business is underperforming.
- Accessing a wider customer base and increasing your market share.
- Diversification of the products, services and long-term prospects of your business.
When mergers and acquisitions are successful, companies can improve their financial position in the market. With a larger business, you might have better access to numerous sources of financing in capital markets as compared to when you have a smaller firm.
The expansion which results from acquisitions and mergers could enable the enlarged company to access equity and debt financing which was previously beyond their reach.