Growth is a driving factor for all companies — whether they are one year old or a hundred years old.
There are two key ways to achieve growth: organically or inorganically. While both strategies seek growth, they vary based on available resources and speed of expansion. Deciding between organic growth and inorganic growth (a.k.a. build or buy strategies) requires constant evaluation of the company, the state of the industry, the state of the private capital markets, and your personal business objectives.
Organic growth is a strategy that focuses on using internal resources to increase revenues and output. Long-term organic growth requires good management, effective planning, and a deep understanding of the customers and industry being served.
The dependency on internal resources can be viewed as either a benefit or drawback for many companies seeking organic growth. On one hand, using only internal resources means a company is growing at a very controlled pace and can quickly navigate through different market cycles and turns. On the other hand, growth contingent on available internal resources means that a business is likely to have slower, incremental growth.
Inorganic growth focuses on achieving expansion through mergers or acquisitions.
One of the key benefits of this strategy is its ability to deliver very substantial changes to a business in a very short amount of time. Most often, inorganic growth is pursued by businesses looking for new employees, new products, or new markets. Alliance M&A Advisors can help with well-executed merger or acquisition to achieve each of these goals — or all three simultaneously. The inorganic strategy allows business owners to “buy” their desired solution, rather than “build” it in-house.
When a business owner is planning to sell in five years, a well-positioned acquisition might boost revenues and market position, yielding a significantly higher valuation from an investor. Alliance M&A Advisors can help you with proper preparation and post-merger integration to make the move successful.
Weighing the Options
It is important to note that nearly any business can pursue either strategy. Although many smaller businesses do not believe that acquisitions are appropriate for them, this is not the case. Alliance M&A Advisors can help business owners best assess their acquisition prospects and find the best partners to achieve the strategy.