By Chris Blees, amaaonline.com
It has been proven in past economic downturns that companies that invest heavily in the right kinds of marketing and strategic planning are the ones that will capitalize the most on the situation and likely thrive when the market turns around.
While a good marketing strategy will enable you to grow your business organically by increasing your market share, another way to accomplish this, and accelerate the growth curve, is to acquire the market share, products, services and employees of existing businesses. Now this is easier said than done, but right now everything is on sale at, sometimes, drastically reduced prices. While there are bargains to be had, the trick is making the right purchases that will benefit the long term success of the company.
It is easier to talk about acquiring a company than actually doing it, which is why the majority of acquisitions are deemed unsuccessful, especially in the public markets. However, the ratio of successful versus unsuccessful deals isn't down to buyers simply being unlucky but because they most likely executed at least one of the following common mistakes:
While the overall economy has certainly had a hand in derailing, in some cases, good deals, the majority of failed transactions are a function of poor planning and bad execution.
Therefore, when considering an acquisition strategy, it is important to ensure that the associated risks are mitigated as much as possible by creating and following a comprehensive acquisition plan, which should include the following:
Following a comprehensive acquisition plan will certainly increase your chances of success. However, while detailed planning is critical, why would you want to grow through acquisition and take on additional risk in a time of uncertainty?
Here are a few reasons:
Growing through acquisition can drastically accelerate a business’ growth plan, and right now there are bargains to be had, but the process needs to be well planned and executed to greatly enhance the outcome.
Chris Blees is the president and CEO of BiggsKofford Certified Public Accountants and BiggsKofford Capital Investment Bank. He sits on the Board of Advisors for the Alliance of Merger & Acquisition Advisors (AM&AA), where he chairs the Certification Committee and serves as the lead instructor for the Certified in Merger & Acquisition Advisor (CM&AA) designation. For more information, please visit amaaonline.com.