Your objective is growth, and it would be easy to deduce from this that the bigger your purchase, the better. Not so. You’ve heard the familiar question, “How do you eat an elephant?” with the equally familiar answer “One bite at a time.” That’s the mindset that works best when strategizing your external growth.
It is dangerous to try to expand too far too fast and to make a quantum leap by acquiring a company much bigger than your own. A series of small acquisitions will give you a better chance that each one will tightly fit the need it is supposed to meet. Your acquisitions will also be easier to integrate and assimilate into your company’s culture.
This principle makes all the more sense when you combine it with my “rule # 1” — have a single reason to buy. Making several highly focused acquisitions will get you further, with more safety, than trying to meet multiple goals with one huge purchase.