Contrary to most people’s beliefs (mine included until I learn’t better) there are other ways to grow a business than focussing your efforts on more Sales and Marketing.
Simpler ways, that have a much greater impact on your wealth and revenue (much much greater).
Up until the last 12 months or so I was firmly in the “grow by marketing” camp, after all when growing my property business the first £2m of properties where added to the portfolio by our marketing efforts or at least the phone calls that turned into leads that turned into deals where provided courtesy of our marketing.
This early exposure to marketing ignited a passion in me and I took it upon myself to learn all I coould over the next few years to get better at it.
However the more I learn’t and applied the more I reasilsed how hit and miss marketing often is, you have to kiss a lot of frogs before you meet your prince or princess, and in the business world this means you have to dig deep into your pockets.
Often this has an affect on cashflow and not in a good way, then what about when you “hit a winner” you then get another problem – how to deal with the new leads and sales, often the cashflow can take another hit as you wait for the sales to materialise or you fullfill the work.
Every book I read on business success seemed to be focussed on more sales and marketing, very few offered a different approach.
Until I became aware of a chap doing things a little differently, Jeremy Harbour had built a large telecoms business through acquisition, using his company as currency to acquire adn merge with other companies.
This got me thinking, and looking back over my carreer to date I realised that acquiring had actually been what had given me the biggest jumps in my wealth.
When I first became aware of this strategy I had about £5m of property in the UK and had even bought a business as part of one of the deals.
So this new thinking and approach resonated with me and got the grey matter churning.
“what if I could combine my acquisitions experience in property with Business’s”
Acquisitions and Mergers in the SME field is a little more involved that buying property, however you don’t need to riddle yourself with debt and it’s much more about people than ticking boxes.
So here’s the intresting bit for you (a kind of bonus after reading through my nostalgic ramblings)
If you own a business the quickest way for you to double your business is to acquire or merge with one of your competitors
Lets walk through a theoretical example.
For the purpose of this illustration lets assume your company is turning over £500k/year.
If you merge your company with another in the same sector that is also doing £500k/year you will now have doubled your revenue to £1m/year and will own 50% of that larger business.
At first glance you may say that this leaves you in the same place you started from. However this isn’t quite true, by combinging two companies you now have a much larger company, larger companies are generally more stable and thus more sellable.
The company will also be more valuable, you won’t need two of everything, so you may be able to get away with one contracts manager, one admin team, one building etc etc this will give you more profit and as business’s usually sell for a multiple of profit it will then be worth more.
Another benefit of this merger is you may be able to remove yourself from the day to day running of the business, giving that reponsibility to the owner of the other company. Allowing you to take a more strategic role e.g. removing the duplications and making the business more profitable.
Believe it or not this can be done without spending a fortune on professional fees and structured in such a way that there is no liability to you should any problems emerge with the other company.
If you would like to see how this could work for you and your company please get in touch and I can help you to do this ( I will even find suitable companies) meaning you can get on with running your business.