Planning to grow your business is the easy part. Effectively implementing that plan, now that’s where the challenge is.
Growth could come organically, or it could come through the acquisition of other businesses to increase your share or offerings in the market you are currently competing in, or to open up new opportunities in new markets. It just depends on your particular growth plans.
When thinking about using acquisition to grow your business, it is important to keep a few guidelines and rules of thumb in mind.
As explained by Wayne Pinnell, CPA and Managing Partner of Haskell & White, on Business Growth Cafe, the first step is to have a clear strategic vision of what you are trying to accomplish by acquiring another business. Where are you trying to go? What is your WHY when it comes to acquisition? What is your rationale?
Whether you are building and strengthening a vertical relationship, connecting compatible businesses, adding on product lines, expanding geographically, growing your market share... the key is to clearly understand the details of your strategic reasoning.
Don’t let your ego get involved. It is one thing to say that you bought a business or took your company public, but none of that matters if it isn’t in alignment with your strategic vision.
You must figure out your strategy before you can implement your plan. As James Cash Penny, founder of JC Penny once said, “Growth is never by mere chance; it is the result of forces working together.”
Much of this strategy work can be conducted in your annual strategic planning meeting. Why is it important to plan for your future? Simply, to help ensure that you are staying on track and not getting sidetracked by “shiny objects” that do not align with your long-term goals for your company/brand. A strategic plan will not only clarify your strategy, but also create clarity and focus throughout all aspects of your business.
Acquisition is simply a tactic, and all effective tactics in business should be backed by sound strategic thought in order to truly build sustainable growth and enduring success.
For more insight on this topic and much more, listen to my recent interview with Wayne Pinnell
of Haskell & White, LLP, on my radio show, Business Growth Cafe here: