Why Acquisition May Be Your Best Growth Strategy

10 Reasons to Grow Your Company by Acquisition Kirkland, WA Wednesday, January 12, 2011
Peak at the right time and you win a championship; even if your team wasn't the best over the whole season. Buy another business at the right time and your sales, profits and exit options grow exponentially. Here are 10 reasons why small and mid-sized companies should consider growing by acquisition.

1.  To expand your customer base and your product base. Sell your products to the acquisition's customers and their products to your customers. All without adding to your sales force
2.  To get great employees who are not in the job market. Because you give more opportunities they'll want to stay and help you grow
3.  Access to vendors who might not consider you as a source to sell their products
4.  Enlarge your geographic footprint without the hassle and cost of starting a branch office and having to steal customers from competitors. This may also get you a desired location that otherwise is unavailable
5.  Eliminate a competitor so you can dominate a market or a niche
6.  Spread your overhead over a much larger sales base so much of the added gross profit goes right to the bottom line
7.  Qualify for volume discounts with suppliers now that you're buying more from them
8.  Get needed equipment that comes with nice things like customers, employees, cash flow and market share
9.  Demonstrate to future buyers that your company can successfully absorb another firm with out a loss of profits or market share. This is huge to larger firms and private equity groups
10.  Scaling the business gives you more options and a higher selling multiple when it's time for you to exit. All other things being equal, larger companies sell for a higher multiple than small ones

For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at eric@buysellswflbiz.com or 800-599-0503. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.