How To Grow Your Company By Buying A Business

Growing a company organically can be a long and arduous task. Developing products and services. Marketing and selling. Building a relationship with customers whilst all the time worrying about the costs and whether your business will work.

An alternative way to achieve a fast increase in the size of your company is to make an acquisition. This means buying a company that you can merge with your existing business. Sometimes the investment you would have to make to reach a certain size in 2 to 3 years can be more than the cost of acquiring a company that could get you there tomorrow. So it’s worth considering.

This can even work if you are starting up. We raised finance for starting a business and, before we even embarked on implementing the business plan, we found one of the main competitors in the market was up for sale. After agreeing it with our investors, we made an offer and acquired the company for a good price. Within 6 weeks we had a fully fledged business completely up and running, with an established name, services, customers, offices, staff and a year’s worth of marketing already done for us. It jumped us at least 18 months ahead in our business plan and probably saved us over £500,000 in costs.

If you already have a business or you’re thinking of starting one, then it’s worth taking some time to investigate the opportunities in your chosen market and seeing what’s available. One of the biggest advantages of buying a business is that it can bring a ready-made customer base. And whatever business you’re in, you’ll know that the costs of acquiring customers can be significant.

You can find businesses for sale through the internet and through specialist business brokers. You can also find them by talking to others in your industry, including your competitors.

You’ll most likely need help from professional advisers when you decide to actually make an acquisition but your initial investigations can be done at a low cost and with minimum disruption.

It’s up to you whether you choose to look for a business that’s smaller, the same size or even bigger. It really depends on what your plans are. You may even find yourself inspired to move into a different industry when you find what’s available.

Of course, acquisitions don’t come without their own special challenges, so you’ll need to understand the risks and rewards involved in buying someone else’s business. However, if you set clear objectives and create a solid action plan then it’s something that can really work for you.

Make a list of what you want in your own business. This could include more customers; more products or services; bigger offices; more experienced staff or any other items specific to your needs.

Then start your search for companies that fit your criteria and at the same time calculate how much it would cost you to achieve all your objectives by doing them yourself from scratch. Once you find some companies that match what you want, you can start making approaches and offers. Your calculations will show you how much you want to pay by comparing what the acquisition would bring you against what it would cost to build it yourself. And you may be able to pay a lot less than that.

Just imagine, after reading this, you could find yourself in 6 weeks time with a business twice the size of your current one and with many more opportunities to explore.