Can the Average Small Business Grow in Mergers & Acquisitions?

One of the most common misconceptions in the global market is that mergers and acquisitions (M&A) only work for large and multinational businesses due to capital capabilities. 

On the contrary, present studies have shown that small to medium businesses can also benefit from M&A. For instance,  McKinsey & Company‘s report shows how programmatic – many small deals over time – M&A provides excess returns.

Source: www.mckinsey.com

For average small businesses owners, this is the key starting point for strategic development. Mergers and acquisitions are essential factors in business development and growth.

How can your average small business benefit from M&A?

Mergers and acquisitions are viewed by others as tricky. But M&A brings more opportunities for entrepreneurs.

• Growth of income and market share. For instance, your small business of cement block manufacturing takes over a cement tile business. Through this acquisition, you can get more projects, expand your network, and increase profit.

• Survival. Partnerships can prevent the end of an average small business through acquiring the business or merging with it. In this way, the declining business will not suffer a complete loss. 

• Restructure and open profitable opportunities. M&A can help small businesses in terms of financial freedom and recovery from debt. It is also a long-term business opportunity with other companies that supports the goals of your startup.

Steps to take in ensuring business growth with M&A

There are practical strategies for the growth of small businesses. This includes security and backup for legal purposes.

• Find an M&A advisory firm that can address your business needs. It serves as the backbone dealer in M&A transactions. They can finalize legal terms and deal contracts. Most importantly, M&A advisory firms can structure and provide services such as creating financial statements and run deal-making processes.

• Find an M&A legal team that specializes in your business scale. They can assist you with your tax, benefits, financial privacy, and related concerns with your M&A strategies. Your M&A legal team can help you ensure that the transaction is legal and profitable at the same time.

“Small business makes up 50% of the economy in most developed countries and yet there are very few buyers focussed on that sector meaning it is a buyer’s market and great for consolidations and roll ups.” – Jeremy Harbour

• Set your objectives. As a small business owner, your long-term goals should always be considered in every action you take. Your small business should set goals for the future. In this way, your growth with M&A is stable, thriving, and competitive.

Key Insights

Mergers and acquisitions can sustain your business and increase its synergy valuation. The process can be challenging, but the opportunities are abundant. M&A is a solid key feature for development — it’s an option for companies when making significant business decisions.