Thank you, again, for reading or listening to the tips Ted Leverette shares with you about financing, valuing, selling, buying and advising small and midsize businesses.
If you want to buy or sell a company, this info can encourage or discourage you, depending upon what you want to do. It can also help you better prepare.
Want to buy a business . . . sooner?
A really big tip for business buyers:
- Don't buy a company if it won't position you to grow by M&A. Otherwise you might be buying a job. And unnecessarily coping too much with your competition. (See below.)
A few topics, including details about the respondents’ industry:
The reality about the sizes of small and midsize companies.
(Savvy buyers fish where there are the most or best fish!)
Who is preparing their business for a potential recession?
(Buyers don't want to be a Greater Fool, which occurs when owners sell their risky businesses.)
Confidence in business growth.
(It’s a good idea to negotiate on the basis of what’s ahead instead of yesterday.)
Profit and revenue history and expectations.
(If the trend is down, this depresses prices for buyers who know what they're doing.)
- The savviest advisors and dealmakers know these things.
- (Owners and sellers: This is your heads-up!)
Eat-to-beat your competition!
The safest, fastest, most economical way to grow a small or midsize business is by mergers and acquisitions. It’s also the most profitable growth strategy.
- And the biggest benefit? Bigger businesses sell for a higher multiple of profit. Bigger is better.
Grow Companies by Mergers and Acquisitions
Let’s face it. Growing your company by “fighting” your competition is the hard way. Whenever you get a competitive advantage, your competitors copy you. When you “steal” their customers or employees, they do the same to you. When you launch a new marketing program, it takes time and money before you know whether it succeeds or fails. This is business-as-usual for the typical owner.
The street-smart owner uses a better way to grow a company and increase personal net worth: Acquire the competition or another type of business. It’s what the big boys do. You can do it too, with the right guidance.
When done correctly, growth by acquisition is faster, safer, cheaper and more profitable than increasing revenue from within the company you already own.
Expand through business acquisition for these immediate benefits:
- Reduce the quantity of competitors,
- synergism when companies combine,
- penetrate new geographic markets,
- gain inaccessible customers,
- diversify products and services,
- obtain skilled employees,
- update or acquire technology,
- have more purchasing power with suppliers,
- convert your mature business into an emerging one,
- which creates stronger competitive advantages,
- and additional net cash flow from the acquired company,
- which in turn provides access to more sources of capital
- and this increases net worth
- and the marketability of the company when it’s time to sell it
- which maximizes the sales price.
Acquiring or merging with a competitor adds marketing clout and improves economies of scale.
And it doesn’t have to be a competitor. Some of the savviest owners quickly grow by acquiring or merging other kinds of businesses that are compatible with their core interest.
So, please remember this:
There’s an easy way and a hard way to grow a business.
- The hard way: Beat your competition.
- The easy way: Eat your competition.
What about you?
Would you like to leverage your strength so you and another company can be stronger together?
We can help you do it
We begin by helping you understand the:
- best kinds of targets;
- how to time your shots;
- how to recognize unnecessary duplication of overhead and achieve other economies of scale;
- how to evaluate the integration of companies (before you pull the trigger).
Strengthen your competitive advantages to secure and further grow your profitability.
When done correctly, company growth by acquisition is faster, safer, cheaper and more profitable than investing more time and money in marketing to increase revenue.
"Grow Companies by Mergers and Acquisitions" is an excerpt from my book:
You’re welcome to take from my new LinkedIn group if you also contribute to it.
Request to join from LinkedIn.
People want to know: WIIFM
Thinking about self-interest . . . searchers get better responses when their outgoing messaging, especially upfront, appeals to the self-interest of whomever they want to influence.
Me, me, about mostly me! This does not work among conversations with friends. People you want to influence don't like it either. Balance. It's essential.
“I want to buy (or invest in) a business like yours” . . . is not enough.
- Messaging works better if you say specifically what you want . . . the response you seek.
- And then next show that what you offer is worthy of the kind of response you expect.
- Keywords and phrases work online. They do, too, in your verbal and written materials.
- Numbers, too, add credibility to what you say and write.
Show you know something about your target when feasible.
- At least tease your groups of like-kind targets with your knowledge of their industry.
Buying a business? It’s all about search.
You can’t buy it if you can't find it.
And search is all about how searchers market themselves to owners and sources of referral to sellers.
Begin by “selling” yourself to owners/sellers of companies to get more owners wanting to sell their company to you.
Buyers operating from a comprehensive marketing plan get better results, sooner, from their search.
Here’s an outline for the marketing plan my clients use:
Marketing Plan to Prepare & Find Opportunities
- Market Research
- Acquisition Criteria
- Your Credentials
- Design Search Process
- Q&A for Interviews
- Assemble Advisory Team
Searchers seeking investors or businesses for sale must know what works (and doesn’t). Preferably without too many errors on the playing field.
In my upcoming monthly e-newsletters I will elaborate on each of the elements of the basic marketing plan above. You’ll see facts, tips, strategies and warnings. Stay tuned.
Don’t have time to wait for my e-news?
My Clients (
USA and U.K.
) Want to Buy a Business
Do you or someone you know want to bring on an investor/working partner to help take the company to the next level? Or maybe sell their privately held business?
My business buyers want to purchase businesses in the
U.K. and in Southeast, Florida and in New Hampshire or relocatable to to those locations reporting combined pretax profit and owner compensation of $/
£300,000 to $/
I specialize in win-win buy/sell transactions by confidentially and safely helping businesses change hands. I guide buyers through due diligence, valuation and creative financing. Buyers compensate me to locate a business for them. I never counsel both sides of a transaction; I am not a broker fishing for listings.
(USA 217 pages or Canadian 204 pages.)
- I refer prospective clients to advisors, brokers, appraisers and sources of financing who subscribe to my monthly free e-newsletter AND also connect with me on LinkedIn.
Please share this with people who might enjoy it.
Ted J. Leverette
The Original Business Buyer Advocate ®