I had many emails regarding my post “Is your competitor for sale?”, the responses show me that some of you certainly have a healthy megalomaniac instinct – good for you!
Here comes the BUT! You need to be careful, for bigger business does not always mean better business. While there is no limit to the size of a bootstrapping business – see Shawn Hessinger on “How big can a bootstrapper be?” – it never the less can be a risky strategy to grow through acquisitions. I put some basic pointer for your consideration below:
1. Businesses come with people and all the associated problems – so make sure the culture fits;
2. Target group should be identical to yours, i.e. serve the same customer base, so you get more turnover for both businesses;
3. Synergies – find them and make them work for you – by sharing resources you can lower the cost-structure in both businesses;
4. Distance – make sure you can easily be in both businesses, so keep it close;
5. Level of debt in the new business – make sure you can handle it easily, don’t risk your current business.
There are other points to consider, so good and trusted advice is absolutely essential. I guess here you will have to decide if you are a gambler (bad) or just a risk-taker (good). Since you made to this point I shall hope you are an entrepreneurial risk-taker.
So, if you are anything like me, you’ll be thinking “Screw it – let’s do it!” ST.