If you are not ready to sell your business, you may currently be implementing growth strategies. We sell many businesses to existing owners, growing their business by acquisition.

Maintaining growth and competitiveness is paramount for small enterprises in the current business environment. These are some of the reasons that owners choose to grow by business acquisitions than by organic growth alone:

 

5 Ways to Grow By Acquisition

1. Cost-Efficiency: If you own an existing profitable business, you can purchase a business with zero down to 10% down by using an SBA 7a expansion loan. If it is 10%, you could make this back in a few months from the profits from your new business.

2. Diversified Revenue Streams: One of the immediate advantages of an acquisition is access to a new customer base, which broadens revenue horizons. This provides financial stability and reduces the vulnerabilities of relying on a single income source. This will increase the value of both businesses.

3. Operational Efficiencies: When two businesses merge, they often unlock economies of scale. This synergy can lead to significant cost reductions, optimized processes, and enhanced profit margins. You may be able to take on larger projects because you have more staff. As a result, this creates additional flexibility and capabilities that make both companies more profitable.

4. Resource Sharing: Acquisitions often lead to shared resources such as technology, infrastructure, and staff. This reduces overall costs because you are not paying for two locations, redundant staff positions, and other resources used by both companies.

5. Skill and Talent Acquisition: Beyond tangible assets and clientele, every business acquisition brings a team with unique skills and experiences. This can be an invaluable infusion of talent, potentially filling gaps in your existing team’s expertise. This can be one of the significant advantages of growing by acquisition in the current challenging climate of hiring qualified staff.

 

What This Means For You

In a recent transaction we were involved in, one company purchased another in the same industry. This enabled them to do most of the items described above with about 5% down on the transaction with an SBA loan. This immediately put more money in the owner’s pocket every month and increased the value of both businesses. It would have taken the business owner years to achieve the same growth without using acquisitions to grow.

If you want to grow your business faster and easier than organic growth alone, consult Gateway today to discuss possible strategies for your business.

Call Gateway Mergers & Acquisitions at (972) 219-6961!