External Form of Growth: Could your business benefit from these?

Business can grow by:

• Internal growth:  By paying attention to the internal affairs of the company, and diversifying into new products and new markets. 
• Go-it-alone option: 
• External growth:  Through mergers and acquisitions.

EXTERNAL FORMS OF GROWTH

Could your business benefit from an acquisition or a merger?

Again, you need to take a good look at the business to understand just where it is at the present time. 

• What are the strengths that you can build on? 
• What do you have that would make your company attractive to other companies? 
• Are there areas of weakness in the business? 
• Could these be strengthened by acquiring another company or merging your business with another?

SOME OF THE QUESTIONS TO ASK ARE:

1. Should we obtain more quality staff with different skils?
2. What do we know about our sector of the industry or service?  Could we improve our business intelligence to our advantage?
3. Is our business underperforming and, if so, in which area(s)?
4. Can we access funds for further development without endangering the normal business cash flow?
5. Could we access a wider customer base and increase our market share without outside help?  How much would it cost in extra resources?
6. Could we diversify into other products or service areas?  What would be the long-term effects?
7. Can we reduce our cost and overhead structure without damaging our product, service, or customer base? Would there be an adverse effect on performance and quality?
8. What would be the effect if we could reduce the competition?
9. Would "organic growth" take too long?

The answers to the above questions will be a good guide to future planning of the business.  But a lot depends on how the management team sees the future of the company.


FACTORS TO CONSIDER

So what would be the reasons for considering growth either through a merger or by an acquisition?

1. Bigger is better?
2. Image enhancement?
3. Market expansion?
4. Product range expansion?
5. Diversification? 

Among the forms of external growth are:

1. Mergers
2. Acquisitions
3. Joint ventures
4. Partnerships
5. Collaborations