When you’re in business you often hear the term “M & A”. The “A” stands for Acquisition and is a fancy way of describing the process of one company buying another company. It’s something you immediately associate with Apple, Google, Disney and other household names - the big players spending big dollars to dominate an even bigger share of the market.
It seems like large and international corporates are always looking to acquire other like-minded businesses, but have you ever thought that acquisition is something your SME could consider too?
Is an acquisition strategy right for your SME?
Acquisitions are not just for the big end of town. It’s a strategy that can be used by any established business to achieve rapid growth, capture markets and curb competition.
A constant challenge for a growing business is finding new customers but the cost of marketing can be prohibitive and doesn’t always yield results. It may surprise many entrepreneurs to discover that the timeframe and cost of developing, implementing and managing marketing could be much more expensive than acquiring an existing business.
A competitor has already done the groundwork and has a sound customer base. It can be much harder and more expensive to lure loyal customers away from an established business. Perhaps they’ve implemented an innovative approach or developed technology that may be useful to your dreams of expansion. You won’t have to start from scratch and acquisition may prove much cheaper than building your own tech. Or you may be interested in expanding your region, offering different products or services - adding an already existing business may be the answer.
What does an acquisition strategy look like?
In Australia, there are estimated to be 1.4 million baby boomers who own businesses and are reaching retirement age. It means there’s a significant opportunity for ambitious SMEs to expand via acquisition.
You may feel like you don’t have the expertise or network to be able to contemplate acquisition but that’s where BlueRock steps in. You’ll need a strategy and we can advise you on each and every step:
- Start by defining a criteria for your acquisition target. Maybe you already have some businesses in mind or ideas about what expansion means to you.
- Using the criteria, build a target list of businesses.
- Develop a valuation strategy.
- Have you thought about finance? Our team will help you get the financial backing you need.
- Use our experts to approach businesses and negotiate a deal.
- BlueRock Law will prepare all the legal documentation.
- Finally, you’ll need an integration plan. How is the newly acquired business going to integrate cohesively with your existing business?
Ready to get started?
At BlueRock, we’re a community of like-minded entrepreneurs and we understand the SME sphere. Just because you aren’t a large or international corporation doesn’t rule out acquisition as a cost-effective mode of expansion. Let’s make it happen.