April 21, 2022
Which way is better to grow your business? Organically or through acquisition? We get this question all the time and my answer is – both.
A business who is doing things right should be pursuing organic growth. You should be intentional about it, measuring it, and leveraging your existing business model, processes, and customers to make it happen.
If you want to accelerate growth, acquire something you are lacking, or simply eliminate a competitor, acquisition should also be part of your strategy.
Here are some key considerations to keep in mind about both strategies:
• Can be slower and more scripted
• Less risky but with a smaller reward
• Culturally safe
Generating growth utilizing internal resources such as talent, processes, vendors, and even customers should be a component of every business strategy.
But what if your brand isn’t known far and wide? Then your growth strategy can be supplemented with a smart acquisition to hedge some risk while increasing potential rewards.
Inorganic Growth through Acquisition:
• Generally faster
• Easier to obtain new service lines, product categories, or expand into new geographies
• Culturally stimulating – taking the best from each entity to improve the whole
• Scaling – more volume, greater discounts, expanded assets, increased talent pool
Growth via acquisition will allow your business to add experienced and proven talent, processes, customers, vendors, and pricing strategies while you simultaneously expand the fundamental knowledge base of your organization. There is also a boost to ROI when leveraging affordable sources of capital, tax benefits, and established operations.
In short, organic vs acquired growth is not an either/or game. If you treat them as complementary components of a well-conceived business plan, you’ll be ahead in your strategic planning and positioned to outpace those who are less inclined to push the limits of their comfort zone.
If any of this resonates with you, we encourage you to take our Sellability Assessment and talk with us to see if your business makes the cut as one who can still command a great exit in this M&A environment. We will be in touch quickly to discuss the results. Click here to take the assessment.
Gilbert & Pardue Business Advisors (GaP) is a Houston-based business advisory firm serving lower middle market and middle market business owners from coast to coast through representation for Mergers & Acquisitions (M&A).
Matt Gilbert and Bret Pardue established GaP to provide owners of lower middle market and middle market businesses – those businesses generally enjoying annual revenue of $10-$75 million – with the quality of M&A representation and value-enhancement services previously only available to upper middle and large businesses. GaP brings highly experienced executives, sophisticated financial and marketing products, proven-effective processes, and fully-integrated expertise to every engagement. No other M&A firm serving the lower middle and middle markets provides the quality of representation and transactional expertise that we do.