Ask Us Anything
Dear Oaklyn Consulting,
I am a business owner who has a substantial local presence. I’m considering acquiring a competitor that has a larger presence outside my current market. This move would expand our footprint immediately and give us the infrastructure to continue expanding past our current boundaries.
Right now, my business is good. It’s steady, it’s stable, and my customers come back regularly. If I want to grow, this feels like the only opportunity that would give me the infrastructure to propel our business forward.
I’m trying to weigh my risks versus the rewards, and that’s where I need advice.
From Oaklyn Consulting
A management team we know with experience building businesses by acquisition says to the owners of companies they approach, “We have a growth mindset,” and this sums up a lot about what it will be like to work with them.
I like their phrase because it reminds me that there are successful executives both with and without a growth mindset, and I wonder how you would describe yourself?
If you have a cash-flow mindset, you might see one set of risks and rewards about the big expansion that acquiring your competitor will represent. If you have a customer service, stability or lifestyle mindset, you could see different risks and rewards, too.
Running a successful business is rewarding but also hard work — whether your goal is to delight your current customers, generate steady profits for your stakeholders or make your enterprise bigger. Acquisitions can be tricky to make work, no matter which goal they serve. But they can also change the game in ways that other tactics cannot.
It sounds to me that you have a few questions to answer before evaluating this acquisition as your only opportunity. For example, what counts as propelling your business forward? Do you want — or need — to grow? Given your substantial local presence and track record of success, where do you really want to play in the future, and how will you win?
When you have answers to these questions about your future direction, then I’m confident you will have the perspective to evaluate the tactical deal-related risks and rewards. Until then, conviction about the pros and cons of your acquisition opportunity will feel elusive.
