Questions to ask before buying competitors
My company has been operating for around four years and I am making steady progress. However, I think that I could ramp up from a small business to a mid-sized one by buying a competitor or two, with staff. What are the pros and cons?
Big question. And an entrepreneurial one at that. Instead of giving you pros and cons, I will pose questions for you to consider.
How ready is your current business to double or treble in size? Are all your systems in place? Are you clear on your future organisational structure and what needs to be in place to get where you want to go?
Leadership and people management are going to be key. You can have great entrepreneurial skill and fantastic technicians, but you also need tremendous management skills to tie the two together.
Every business – even in the same field – has a different way of doing things. Be aware of the pitfalls of blending cross cultures. Do you have a clear strategy to merge the cultures and do it in such a way that everyone is comfortable and still feels reasonably safe and willing to buy into your vision and way of doing things? Mergers, particularly with smaller businesses where everyone knows everyone else, are like impending marriages.
Once you have identified your prospective ‘partner’, spend some time getting to know them. In other words, date first, then get engaged and learn more about each other before walking down the aisle.
Do you have training systems in place? How are you going to position the change with the clients so they still feel important and cared for? The last thing you want is a mass migration of unhappy clients. With the right elements in place, your strategy can certainly ramp your business up.
Published: Friday, February 04, 2011blog comments powered by Disqus