Here’s Why This Is the Ultimate Growth Hack

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Hey, it’s David

Last week I was in the Delta Sky Club waiting for a drink. The lounge was packed, and the drink wait was long. The guy in front of me starts talking about how crowded airport lounges are these days. I knew what his next comment/question was going to be, “So, what do you do for a living”?

I debated whether to make something up, to avoid talking business, but then I realized the conversation might make for a good “M&A From the Plane” post. Funny how times have changed for me.

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…I wish I had more flight options on this trip

We quickly discussed what we both do, he being the CEO of a small distribution business and as we finally sat down with drinks in hand he asked me, “How hard is it to grow through acquisition?”

His comment was sparked by the simple fact his business had been fairly stagnant in terms of revenue growth for the last three or four years. 

In discussing the pros and cons of growth via acquisition, I thought about some of the most important reasons why growth by M&A makes sense:

1. Enter new markets: Acquisition can be a quick and easy way to enter new markets, which can help companies avoid the time and expense of building their presence from the ground up. This is especially true if your management team has experience in other market segments.

2. Expand product or service offerings: Companies that offer their customers a wider range of choices should increase their market share. This makes a lot of strategic sense for distribution companies. The more your customers can rely on your product offerings the quicker they can eliminate other vendors.

3. Gain access to new technology: Acquisition can also be a way to gain access to new technology, which can help companies avoid the time and expense of developing the technology on their own.

4. Improve efficiency: Operational efficiencies are key reasons to acquire a company. The ability to integrate what the acquisition target has already completed as it relates to your company, with respect to streamlining, can be a real game changer.

5. Improve morale: Acquisition can also be a way to improve morale, which can help companies create a more positive and productive work environment. This point is sometimes lost on acquirers. However, employees want to be part of a growing organization as it gives them a sense of ways to grow personally within the organization. Morale tends to fall when employees don’t see any opportunity to move up within the company.

6. Gain access to new talent: Acquisition can also be a way to gain access to new talent, which can help companies add valuable skills and experience to their own workforce. I have worked on many deals where the primary driver of the transaction was to gain access to a broader and deeper array of employee talent. This is especially true in fast-moving market segments where the lack of qualified employees stymie’s growth.

Final Thoughts

Growth through acquisition isn’t just about scaling revenue, it’s about unlocking strategic advantages that can position your company for long-term success. Whether it’s entering new markets, enhancing operational efficiency, or boosting employee morale, the right acquisition can be transformative.

The key is ensuring you approach M&A with a clear strategy, a deep understanding of your goals, and a willingness to embrace the opportunities it can bring. After all, in business, as in life, sometimes the fastest path to where you want to go is through collaboration, not just competition.

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David