My first two posts talked about whether you as a business owner could or should exit your business. If you have decided to stay involved, then the question now must be, how can I grow my business in these troubled times?

Growth by normal means is difficult enough in a stable market, but when we are in recession? What do you do, institute a new advertising program, put more reps on the road, new direct mail campaign, drop prices to buy market share or maybe a larger Yellow Pages ad? All these are possibilities and maybe a combination of all could work, but have you ever contemplated increasing market share by buying your competition? These are troubled times for all businesses, so if you are finding things tough out there then it stands to reason that your competitors will be as well. If this is the case then a timely well thought out approach could net you the prize!

Your first step obviously is to get the approval of your bank. I did some investigations with bankers we deal with to find out what type of transactions they are most likely to finance in this market. A good question for a business broker to ask you might say, so hopefully we are on the same page.

Competitor Acquisitions by existing bank customers! Banks want to deal primarily with the devil they know, they still have to lend money in order to make money. If there are existing bank customers wishing to purchase a competitor, it appears to be the path that offers the least risk. Excellent, that is good to know. So if your business is sound, you have your Financiers buy in, how do you go about it? You employ the services of a Buyer’s Agent. The best description I have found on Buyer’s Agent is here: Bizquest Blog

The key to this process is the broker works for you rather than the owner, so any appraisal or negotiations during the process are on behalf of you the buyer, not the seller. The benefits of this methodology are clear:

• You as a business owner can target a company or business category that interests you.
• It happens now rather than by the off chance that the business owner decides to list the business for sale.
• Your identity remains confidential until the business owner has agreed to the process.
• You have a third party handling all the negotiations and those negotiations are for your benefit. This will result in you buying on your terms and conditions.

Growth by acquisition in a recession makes sense. Your target company will never be cheaper, interest rates are lower than in recent memory, financial institutions are encouraging it and now we have explained how you can achieve it. If this is something of interest, please feel free to send me an email and we can talk it through.

See you next week.