1. Acquire a company already successfully producing and selling the product.
2. Hire a manager and employees who can operate the type of equipment you are considering, and bring everything in house, knowing there will be a ramp up period.
3. Merge with someone who has the contacts and customers in your target market, but perhaps offers a different service. You are buying access instead of capabilities.
4. Buy a company that has an extensive sales force and can quickly roll out your product to a larger client base.
5. Form a strategic agreement with companies like yours that serve different geographic or international markets.
6. Rent out space to a complementary business that can serve your clientele under one roof.
7. Hire a consultant to improve your efficiency and reduce your cost of sales, giving you capital to invest internally.
8. Find a trade provider who can produce efficiently, giving you the ability to mark up your price.
9. Offer wholesale pricing to a company who can return the favor, allowing you to resell their products at a profit.
To make these options work, focus on a strategic business model. Look down the road to mutually beneficial situations. Avoid self-centeredness and greed. Alliances work best when they are about more than money.
If buying another company seems like a good option, don’t go after the first prospect that seems to fit the bill.
- Work with a qualified M&A advisor to solidify your goals and create your road map.
- List the characteristics you seek in an ally or acquisition.
- With your M&A advisor’s help, identify top targets.
- Decide how targets will be discreetly contacted and which type of confidentiality agreements are best for the situation.
- Research how much buyers are paying for these types of companies.
- Calculate if you will need key people to be retained to run the business.
- Figure out if the new company will come under your roof -- and how that will happen, including timeline and technology.
- If you decide the new company will operate in their current or other location, evaluate leases and contracts.
- Prepare for a walk through on both sides to see if there is synergy.
Once you finalize your purchase or alliance, keep your eye on growth. Don’t get trapped in the daily grind.
- Consider hiring a capable general manager to handle the transition. A good manager in this scenario will earn his or her keep and will be a steady bridge between the new company and yours.
- Continue to track financials. Your reports should give you data points that can tell you exactly where the processes are working -- or breaking down.
- Communicate openly and regularly. Let people know how things are going and where you are focusing. Enlist everyone to make the transition a success.
- Be highly visible and operate with integrity.
Growing through acquisition, merger, alliance, or strategic partnership is a big step. As you plan your road map, find an advisor or qualified expert to help you, and reap the rewards!
Rock LaManna, president and CEO of LaManna Alliance, helps owners in the label and narrow web industry sell, acquire, or grow their businesses. With decades of industry experience, the team at LaManna Alliance can help you with your next steps to maximize your business and prepare for your future. All conversations are confidential and based on trust. For more information, visit RockLaManna.com.