If you’re looking to move your business forward, you might consider the strategic acquisition of another company.
Perhaps the owner of another business in your industry, maybe even one of your direct competitors, is contemplating selling their business and may be willing to sell to you at a very reasonable price.
That can be a tempting opportunity – especially if you can reduce the total costs of running both businesses together and create more value for the combined company.
In short, you’re looking for an opportunity where the “whole exceeds the sum of the parts.”
But buying another business can be risky. CEO advisor Robert Sher points out that approximately 50 percent of merger and acquisition deals fail. And Forbes contributor Frank Vermeulen suggests that percentage may be more like 70 percent.
Statistics like these mean you should carefully consider both the advantages of an acquisition and the pitfalls to avoid.