Stop Wasting Money on Marketing!
Stop Wasting Money on Marketing
Marketing is a very capital and effort-intensive endeavour. However, it does not assure you the success that you have set out to achieve. It may bring plenty of eyes to your business and increase exposure, but conversion to actual sales is not a foregone conclusion. One thing that could guarantee an increase in both clients and market share more than marketing can is business acquisition.
What Is an Acquisition?
An acquisition is when a business takes a competitor out of the market and assumes its market share, capturing its client loyalty. In addition, the purchaser acquires products, services and other strategic opportunities already developed by its competitor. This enables the purchaser to immediately put all assets to work to derive revenue with little to no time lost.
Businesses usually acquire other businesses that align well with their existing products or services. This typically requires extensive research and due diligence to ensure that the acquisition process goes smoothly.
Benefits of an Acquisition
Acquiring another business is a strategy that can ensure dominance over an industry. Through such, the purchaser not only gains access to a new customer base but also minimises the competitive pressure it experiences within its chosen market sector. Aside from acquiring businesses with similar products or services, purchasers may choose to acquire one with completely different offerings to enter a new market with minimal to no setup time required.
Purchasing an existing business as a bolt-on has many other advantages. First, if you choose carefully, the business you would have bought has immediate cash flow. Second, it will have an excellent financial history that can help you predict what can transpire upon settlement. Third, the existing staff members will have the experience necessary to help you settle into your new business and merge it with your existing one.
An acquisition also enables businesses to leverage synergies when activities are combined with other key players in the market. When two key players work harmoniously together rather than against each other, there is usually a boost in performance, efficiency and profitability.
When Are You Ready for an Acquisition?
As businesses evolve and mature, there comes a time that the need for acquisition cannot be ignored. However, recognising that an acquisition may be needed is very different from preparing a business to acquire another.
A business that seeks to acquire another must have solid financials, generating attractive revenue. Timing is also crucial. All aspects of your business should be mature with a good, experienced team behind it and well-systemised processes and procedures.
Once everything is ready, an owner must then ensure that the acquisition opportunity is the right fit. A purchaser must closely analyse a potential acquisition's culture, leadership styles and plans and ensure that it is aligned with the business it will serve to bolster. After you have joined forces with another player through acquisition, you could potentially unlock many opportunities you were unaware your business was capable of.
Examples of Successful Acquisitions
A good example of a business that made successful acquisitions is Microsoft. It obtained LinkedIn to increase its market share and secure revenue in the social media industry. Microsoft also purchased GitHub, which increased its market share in the Cloud OS market.
Another large example of a successful acquisition is Disney’s purchase of 21st Century Fox’s assets. Disney was able to secure the 20th Century Fox film studio, its TV production arm, Fox-owned cable networks and more to establish firm control of the multimedia market.
Acquire a Business Over Spending on Marketing
Spending on marketing may be hit or miss. You could end up striking a gold mine or chalking up your marketing expenses as a loss. On the other hand, a carefully planned and strategised acquisition may just be as or even more effective than a good marketing effort. Acquiring a business brings with it many advantages, such as diversifying revenue streams, boosting the number of clients and expanding market share. All of which are crucial for the growth and success of a business.
Interested in acquisitions? Reach out to the LINK Business Sales Team
Tags: selling acquisition
About the author
Farzin Hesari
Farzin Hesari, CEO of LINK Australia, is at the forefront of revolutionizing the business brokerage industry. With a laser-focused vision on expanding ...
