The building blocks of success

Develop a growth mindset

Scaling up an existing successful business is not always easy, it usually requires a change in mindset, challenging existing business practices and models and in most cases some additional capital. Very few existing businesses are scalable without some of these factors being required, and before you set off on this course it’s essential to ensure that your business fundamentals are sound.

It’s not all Big Bang theory

Aside from organic growth, many entrepreneurs view an acquisition strategy as a tried and tested method of scaling up. Often, surprisingly, the best returns do not come from the one-off ‘big bang’ transactions, but smaller deals undertaken as part of a programmatic acquisition strategy. To be successful it’s essential to have a merger and acquisition blueprint that is sound and enduring and to have advisory teams that are geared to delivering those acquisitions efficiently.

Consider an integration strategy upfront

Over the years we have looked after many serial acquirers and that experience has given us some insight into what makes the difference between success and failure. A good litmus test is integration or lack of it. Those that are driven by growth, almost for the sake of it, pay little or no attention to integrating the acquired business. Often, the team responsible for closing the deal is entirely separate from the integration team.

That rarely works, and can result in quite a failure rate. Conversely some tackle integration as early on as their initial due diligence on the target. They then have a finely tuned integration programme that kicks in immediately on close and is concluded within a few months. Any impediments to speedy integration are tackled as part of the initial evaluation of the target, rather than an inconvenient afterthought.

Focus on the outcomes 

Slick acquisition processes define success, as well as focussed and balanced transaction documents that avoid long winded and pointless negotiation. It’s also useful to create a structure that encourages sellers to assist in the ongoing integration of the new business with the existing one, as well as support any growth strategy, post-sale. Most successful deal teams don’t wait for targets to come along by chance, they actively search them out and spend considerable amounts of time courting the right opportunities, with most deals then being ‘off market’.

Prepare, prepare, prepare

We have seen first-hand from our clients, including those on the Fastest 50 list, where growth funding has been obtained to enable a company to successfully execute a buy and build strategy. In many cases, those clients had already put in place their acquisition strategy ahead of seeking funding. This enabled them to showcase to an investor their ability to identify a properly targeted opportunity at the right price, and demonstrate the impact of the acquisition on their turnover. These acquisitions were all undertaken on an ‘off-market’ basis which meant that the company did not overpay for the targeted business.

Seek the right advice

We have considerable experience in the Corporate Team of working with acquirers and knowing what makes a slick legal process. I’m always more than happy to share that knowledge and experience with anyone contemplating a buy and build programme, so if you are thinking about it, please get in touch. Nothing ventured, nothing gained.

For an informal chat with Robert, please get in touch.