Why You Should Consider A Business Acquisition Strategy

But an experienced business broker can walk you through the process and show you that it’s not just the big guys that get bigger by buying companies.

Customers always prefer to work with trusted vendors who have already done a good job on one aspect of their home.

Not every homeowner has a commercial building, but almost every commercial building owner has a home.

You won't have to double your administration costs; you’ll be able to manage two companies with relatively small investments in technology, service costs, and staff.

Buyers are more confident taking on a company that isn't completely reliant on the owner to make sales or manage the day-to-day business.

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Joe Shemansky     01/03/2023

Why You Should Consider A Business Acquisition Strategy

Even if your business is small or in a special niche, you have the potential to expand through acquisition. Many owners don’t even consider this possibility; they can be intimidated by the complexity, the uncertainty, and the price tag. But an experienced business broker can walk you through the process and show you that it’s not just the big guys that get bigger by buying companies.

Here are some reasons an acquisition might be the right move for you. If you’re in a specialty with a long life, say garage floor coating, roofing, or exterior painting or siding, you’re constantly looking for new customers. You won’t see repeat customers for years. Acquiring a complementary business like closet design, window or door installation, or any number of other services can give you the opportunity to sell more within your current market. Customers always prefer to work with trusted vendors who have already done a good job on one aspect of their home.

You might also consider adding a commercial line of business to your residential specialty, or vice versa. Your crew will have a shorter learning curve since they’ll be familiar with the materials and processes; they’ll just need to learn about some new equipment and work on a different scale. (They may also need added certifications and licensing.) Once you are successful in both sides of the market, you’ll find referrals come more easily. Not every homeowner has a commercial building, but almost every commercial building owner has a home.

Acquiring a company can expand your product line, your customer base, your geographic reach, and your access to new talent (a real plus in a labor market that has been very challenging for years.) And it could be much more affordable than you think.

Your initial investment, especially if you qualify for a Small Business Administration loan, could be just five to ten percent of the purchase price. An SBA loan can also provide short- and long-term working capital, help you refinance your current business debt, and purchase furniture, fixtures, and supplies.
You may also achieve savings when you scale your new business with your current business. The new company may have a larger storage facility or real estate with favorable lease terms, or newer or better equipment. You won’t have to double your administration costs; you’ll be able to manage two companies with relatively small investments in technology, service costs, and staff.

Many small business owners find that they finally have enough business to cover the cost of full-time workers in the office or in the field. The acquisition, adding market share and customers, may finally free you up to work on the business instead spending your time in the business. When you’re finally ready to consider retirement or selling the business, having professional and fully trained staff on board will make the company more valuable to a potential buyer. Buyers are more confident taking on a company that isn’t completely reliant on the owner to make sales or manage the day-to-day business.

So whether you’re looking to expand your market, pursue a complementary strategy, or simply find ways to grow your company, acquisition can be one of the fastest and most effective ways to achieve your goals.


This blog was originally written by Joe Shemansky, MCBI, M&AMI, CM&AP, CBI. Joe is the Principal Broker-Owner of We Sell Construction Businesses (www.wesell construction businesses.com), which is headquartered in Clermont, Florida. We Sell Construction Businesses provides business brokerage and M&A transaction services to main street and lower middle market construction business owners, looking to sell their businesses. He can be contacted at 352-404-9191 or joe@wesellconstructionbusinesses.com.

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