Why Business Sales Should Be Considered Part of Your Growth Plan
Why Business Sales Should Be Considered Part of Your Growth Plan
As a business owner, you are looking for growth and development. To have a successful business you need to have more money coming into the business than going out. What is often overlooked is alternate ways to grow a business, rather than simply looking inside the business, look outside.
This is where business sales come into play. Buying a business that can align with your current operation can not only help you to grow, but grow faster.
When you attend business seminars teaching you how to systemise your business, how to market effectively, and how to grow profits, what is often overlooked, are external ways to grow. Buying another business for sale, often referred to as a merger or acquisition is a great option.
When you look at business sales in the five million to ten million dollar range, often referred to as mid-market you will see a lot more mergers and acquisitions than say the $300,000 price range. Why? Because these business owners understand the value of aligning their business with another or buying out a competitor.
Why you Should Consider Established Business Sales
An established business has a number of key elements that you as a business owner are looking to acquire. Buying an established business can help your business in a number of ways.
Here are three great advantages of buying an established business as opposed to continuing to focus on growing a business internally
Do you want more clients? Have you done your forecasts and how long it will take you to get another 20% of the market share?
What if a competitive business comes for sale? How much is that market share worth to you? How many hours, how much wages will you pay, and how much marketing budget will it take to get that 20%?
Buying a competitive business is a great way to increase your market share in a fast and effective way. Whether you keep the business brand and operate as a competitor, merge into your current business, or take a different approach will depend on your business and industry. But what is important here, is increasing your market share so you can increase profits.
2. Skills and Experience
Good teams are hard to build. It takes time, money and energy to develop a team that is effective in leading a business to success. The business you are buying may have a well-established and experienced team. Especially if you are buying in a niche industry or one requiring highly skilled workers.
Buying an established business can give you access to a talented and experienced workforce. The key here is aligning them to your current business and determining how many will continue once you buy a business, especially if your buying a family-owned business.
3. Money, Money, Money
Every successful business understands one thing… money. No matter how you spin it - a business is successful because it makes money.
When you are evaluating growing your business, you make forecasts. How much it will cost to do certain things, acquire certain office space, train new team members, market and find clients, source a new product and so on. Running and building a business costs money.
What if you can buy a business, that will grow your current business fast and for less money? Waiting 5 years to hit a goal, you can hit it in 6 months if you buy the right business. Waiting 5 years you may miss the market… no point selling fidget spinners in 2022 - you missed the boat!
Often business owners overlook the possibilities of growth by buying a business.
How to Choose Which Type of Business Should be in the Growth Plan?
There are three types of opportunities you can look at buying to add to your current business.
Buy a Competitor - You run a clothing business and see a competitor is looking to sell. With a database of 40,000 clients, 300,000 million Instagram followers and supply chains in Australia and overseas - it’s a great opportunity. You could run two brands or close down one, harnessing their database and supply chains.
Buy a Similar Business - If you’re a mechanic and tired of referring your clients to a smash repairer up the road, maybe it's time to buy a smash repairer business for sale and service your clients for multiple parts of their journey.
Enter a Different Market Level - Perhaps you sell high-end jewellery but are looking to expand into more entry-level options or costume jewellery. Adding these products to your current collection may affect your brand and devalue it. What you may consider is buying a business that is already in that space and growing it. Keep the brands separate but operate in the same industry.
When you Buy a Business You Get so Much More!
If you’re in the market to expand your business. Learn from the big guys. They buy businesses through a merger or acquisition and then decide what to do with it. Maybe they keep the brand and use it as a ‘competitor’ in the public eye. Maybe they close down that business and retain all the valuable aspects.
When you're growing your business from the inside, it can take you years and years to get to that level. It can take you a lot of money and a lot of mistakes. When you buy a business as a means of growth, you are getting so much more and getting it so much faster.
What you can achieve by buying a business sale.
Client Infomation - access to new clients with minimal marketing expense.
Team members who are skilled and have experience - how many hours of training, hiring, and networking will it take to obtain the same workforce?
Software and technology - depending on your industry. The business you are buying may have specialised programs used to run the business. They may have systems in place that take hundreds of hours to develop.
Machinery and Equipment - depending on the type of business you are operating or buying. The business may have specialised equipment that is hard to source, or expensive to buy new. You can get access to this quickly and usually at a good price, then try to buy and source yourself.
Suppliers - Creating those connections and finding the right suppliers can be difficult and time-consuming. An established business has already done this legwork. Add this to your current business and you could be on the track for marked increases in profits.
Office or Retail Space - Did you want that cafe space on the main road? Perhaps that warehouse in the Sydney CBD? When you buy a business you could obtain the best locations or a good commercial lease.
Don’t Forget the Risks
Like most big ventures there are risks involved. Always obtain professional advice when buying a business. It is a great way to expand your current operation and comes with many benefits if you do your research and understand what you are buying and how much you are paying.
Business is about growth, it is about success. Buying an established business can be a quick way to obtain that growth.
About the author
CEO Bsale Australia
Vanessa is the current manager and CEO of Bsale Australia. Over the past 11 years as a business owner, she understands what it takes to grow a ...