Did you know about 97% of acquisitions are small to mid-sized companies? Acquisition is an effective tool that can be used by companies of any size, not just those in the Fortune 500. To see how, watch my interview with Matthew Lesko.
When we think of mergers and acquisitions, we often only think of mergers and acquisitions as large transactions, like Hewlett Packard’s purchase of Compaq in 2001. But the truth is M&A can be used to rapidly and effectively grow a company of any size.
Acquisition does not necessarily mean buying 100% of a company. Transactions can be structured in a number of different ways. For instance, you could acquire a majority or minority interest in a company or acquire the rights to a certain brand, product or intellectual property.
When pursuing acquisition, first think about your vision for the company. The companies that do this well understand that M&A is not just about the transaction – the legal and financial aspects – but about the strategy.
Think about how you can make your company more valuable to your existing customers. If they want to buy related products or services, you can add value by becoming an aggregator, in effect a one-stop shop. Be the “easy button” for your customers.
For example, if you sell suits you can add value to your customers by selling ties, too. This doesn’t mean you need to acquire a tie-making company; you could simply acquire the rights to sell those ties under your name. This acquisition would allow your customers to buy all they need at one convenient place.
When thinking about growing your business, don’t be intimidated by the legal or financial side of mergers and acquisitions. Remember to first focus on your vision and on providing value to your customers.