Growth Through Acquisition vs. Organic Business Growth

Growth through acquisition is a very viable option for small and medium-size businesses. You can accelerate your growth dramatically, acquire expertise, strengthen management, gain a stellar sales team, acquire technology and new products and services, as well as, secure customers and revenue.

Every CEO/business owner and business is unique so you want to determine if an acquisition is the right growth strategy for your company. Or are you better off growing in more organic ways by expanding geographically, or developing new products or focusing on aggressive sales and marketing?

Let’s look into the pros and cons of growth through acquisition versus organic business growth so you’re in a better position to make that decision. CEO Advisor, Inc. focuses on growing businesses to the next level, and are experts in assisting CEOs with both organic growth and growth by acquisitions.

The Pros of Organic Growth

Growing your business organically offers the most control over how that growth occurs, but certainly takes longer. By staying focused on continually improving your sales and marketing, improving your products or services, and identifying new or more profitable markets, you’re going to find that growth is more predictable and controllable over the long term.

The Cons of Organic Growth

The biggest potential negative aspect of relying on strictly organic growth is that it’s a slow process. It may take years for the market to evolve and for your business to be able to afford expansion into a new geographic area. Developing new products and building substantial sales for these products can take many years. Growth is paramount to profits and building value in your business so compressing time can be critical.

The Pros of Growth From Strategic Acquisitions

Unlike steady organic growth, growth through an acquisition or merger is generally much faster and can yield a number of other instant benefits, if done right, that can help make that rapid growth sustainable.

Growth through acquisitions is a faster, less risky method of growing your business and achieving economies of scale. The competitive advantages include acquiring and eliminating competition, immediate market penetration, gaining key people and expertise, securing new products and technology, gaining access to international markets, as well as, gaining valued management team members, customers and added sales.

The Cons of Growth Through Acquisitions

Growth through acquisitions is rapid and can yield fast results, but you will need the expertise and experience to execute on this strategy properly. CEO Advisor, Inc. are experts in the entire acquisition process. The planning and execution required in the time immediately following an acquisition or merger can present a number of management challenges that could hinder that rapid growth or plant the seeds of future failure.

Each merger or acquisition requires organizing the workforce and/or management team so the post-acquisition integration process is very important and CEO Advisor, Inc. can assist you through the process.

The question of whether to make an acquisition or expand organically must be answered individually by each CEO or business owner based on their own unique circumstances, but a business advisor/M&A will be extremely helpful in advising you every step of the way.

Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. for a no cost initial consultation at (949) 629-2520, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.

Leave a Reply

Your email address will not be published. Required fields are marked *