As entrepreneurs, at some point during the life of our companies, we encounter opportunities to acquire another business as part of our growth strategy. Unfortunately, the process of acquiring another company is often made unnecessarily complex by advisors and others in the market, and as a result many entrepreneurs lack the confidence to pursue an acquisition strategy. Indeed, many entrepreneurs are held back by concerns about how to source opportunities, structure deals and access the capital necessary to make the deal work.
We believe that strategic acquisitions are a critical component of the scale-up process and we advise fellow entrepreneurs to follow three simple rules to ensure success. First, you must be clear about your purpose for pursuing acquisitions. Is it necessary to open up a new market, add a new product/service, expand technological capabilities or add key people? If the “why” isn’t clear, then it is impossible to know when to move forward or when to walk away. Second, you must have a defined strategy (which we define as a great story told backwards) coupled with a properly conceived plan to execute that strategy. Finally, and perhaps most importantly, once the deal is closed, you and your senior leadership team must be entirely focused on ensuring that the acquired business, product and/or team are fully integrated into your company – from core values and culture all the way down to the systems and processes that are integral to the success of the business.
To learn more about our thoughts on acquisition strategy, please click on the video below.
If you are interested in working with us to develop your own acquisition strategy, please check out one of our upcoming CEO Bootcamps held at The Retreat in the Florida Keys.