Should Business Owners Consider a Mergers & Acquisition Strategy for Growth?
Is your small or medium-sized company’s progress stagnant, and you’re looking for ways to boost its growth? When your company isn’t growing as expected, you may change your strategy to get different results. One option you may consider is expanding through a merger and acquisition. When coupled with organic growth, the merger can help your firm attain its growth targets.
Before you proceed with a merger, you’ll need to know how this strategy can benefit your company. Read on to learn more.
1. Availability of Trained and Experienced Staff
Before a company can improve internal operations, the management needs to ensure they have qualified staff to handle the work. However, getting the right team is not always easy, particularly if you don’t have enough resources.
Through a merger and acquisition, a company can leverage qualified staff with vast knowledge in the industry. So before you make a proceeding with a party, ensure the firm you are merging with has a built-in system that can complement your company and operate on a large scale.
Remember, systems and people are vital to how successful a merger and acquisition performs. If these two factors are well-matched, a company can thrive and operate on a large scale.
2. An Opportunity to Increase the Market Share
Most company owners desire to increase their market share and improve the chances of attaining business objectives. Through merging, you can diversify your company’s products or services and grow the business’s opportunities in the long term.
The company you’re acquiring should provide additional products or services so you can sell them via your established distribution channels. This brings more revenue to the business, and with enhanced economic productivity, the company can expand and increase its market share.
3. A Chance to Leverage Synergies
If handled properly, a strategic merger may result in synergies that provide value for both companies. Cost synergies entail reducing production overheads by taking advantage of the traversing resources or operations and combining them to attain the daily objectives. The company can cut costs without interfering with operations if the merger is strategic. For instance, the company may eliminate redundant facilities, business units, workforce, and operation areas.
In some cases, the merger may increase the purchase and negotiating power due to the combined budget. Mergers also result in revenue synergies that change the competitive power and provide opportunities to transform the market dynamics. Companies can use this to make more money in multiple ways. For instance, access to new markets, territories, and customer bases can increase sales.
4. Availability of Additional Financial Resources
Mergers and acquisitions may allow a company to access valuable assets or capital to expedite the growth plan. Since the company is larger, securing capital from banks or other available financial institutions may be easier. The firm may use the funds to boost operations or obtain new assets.
If you think your company can benefit by growing through M&A, reach out to us at Sun Mergers & Acquisitions, we can offer sound advice throughout this process and guide you through the process. Call us today for more information.