Growth Strategy for Achieving Critical Mass
When it comes to business it’s difficult to come up with an example of when it’s not better to be bigger.
Why Bigger is Obviously Better
Small businesses suffer from a long list of weaknesses which serve to keep them small in the vast majority of cases. Most of these weaknesses can be attributed to a lack of capital. When capital is lacking a company will suffer in all sorts of ways. It won’t be able to afford professional management. It won’t be able to attract talented and motivated employees. It won’t be able to afford the most efficient technologies. It won’t be able to quickly jump on new opportunities for expansion or profit.
Access to capital can solve most of the problems faced by small enterprises. Capital helps them to:
– Hire professional managers
– Attract better employees
– Break through critical mass barriers
– Attract bigger customers
– Market more effectively
– Purchase in greater volumes for price breaks
– Achieve economies of scale
– Expand into new markets
– Afford the most efficient technologies
– Broaden the product line
– Build a recognized brand
– Take advantage of breaking opportunities.
The list of benefits could be lengthened, but I believe that you get the idea, so let’s move onto the rationale for considering growth through acquisitions.
Growth via acquisition is often the fastest way that a bricks and mortar company can grow. This rapid growth minimizes the amount of time required to reach the stage where the company can tap into debt and equity capital which will enable it to solve all of the problems listed above and more.