Entrepreneurship Why strategic is hard work, day in, day out. It takes years before you can scale up. Many companies do not even get past the first growth phase, because they try to do everything themselves and see autonomous growth as the only form of growth. While SME entrepreneurs in particular grow very quickly through strategic partnerships and acquisitions. But why would you want this and what is actually the point of growing through acquisition? What are the risks and pitfalls?
“Growing a business through acquisition is faster, cheaper and often less risky than expanding on your own,” say Peter Rikhof and Floyd Plettenberg in their new book Growing Through Acquisition (affiliate). According to the authors, rapid growth through acquisition is not nearly as complicated as it seems, once you know the rules of the game.
Why growth through acquisitions can be more attractive than organic growth
97% of Dutch companies with employees grow less than 5% per year. Of all companies with more than ten employees, only 13% grow by more than 10% per year (CBS). If you want to grow as an entrepreneur by, for example, 30% or 40% per year, you will have to look at other strategies. In order to choose the right strategy, three criteria play an important role:
degree of risk
yield
availability of financing
Suppose you have a company and you want to grow by 50%. You take over a successful company for 1 million that is half the size of your own company. The chance that you will grow by 50% within list of oman consumer email one year with an investment of 1 million is quite high. The chance that you will become one and a half times as big with an additional investment of 1 million in marketing, sales, operations and product development is considerably smaller.
In this case, growth through acquisition is not only faster, but also the return is higher. Moreover, it is easier to apply for a loan or investment for an acquisition than for financing your own growth strategy.
Risks of growth through acquisition
Growth through acquisition offers great opportunities how to position my website on google? learn the 5 steps for the ambitious SME entrepreneur, but not every SME entrepreneur is ready for growth through acquisition. An important condition is that you as an entrepreneur first have your own company in order. Ensure a clear vision and growth strategy, good preparation for the acquisition process and a clear integration plan.
If you don’t do this, there is a chance that a takeover america email list will cost you unnecessary time, money and energy. Therefore, never just start a takeover without a strategic vision or takeover strategy. In addition, there is a risk that you as an entrepreneur become too eager, especially once you are in a takeover flow. There is a risk that you pay too much and overestimate the chance of success, as a result of which your takeover does not yield enough return or even a loss.
Keep your wits about you and never act hastily. Always do a thorough due diligence so that you can adjust the value if it turns out that the organization is not as financially positive as you initially estimated.