The fastest route to business growth10th March 2021
The business owner probably couldn’t believe his luck.
He had built a small company that developed radar reflection technology which helped yachts detect people lost at sea.
Now he was ready to retire.
And who should express interest in buying his company - but telecoms giant Marconi?
At first glance, the interest seems strange… Marconi does not operate yachts.
But they saw value in the technology, which they could use for other purposes, including computer testing.
Our Associate Director Shirley Hoy told me this story, which happened when she worked for Marconi many years ago.
And it’s always stuck with me, because it shows the kind of opportunities that can arise when business owners sell up - or even go into administration…
…And not just for global conglomerates, but potentially for you too.
Right now, those opportunities are all around us.
We’re seeing a huge surge in mergers and acquisitions, as I’ve mentioned in my emails over the past couple of weeks.
And while there are fewer insolvencies than usual at the moment because many companies are being artificially kept alive through government loans, that will end when that debt needs to be repaid. You can expect a glut of business insolvencies later this year.
In many cases, these are excellent companies whose owners have simply reconsidered their priorities in the wake of the pandemic, or who have decided to exit for their own reasons.
And simply because a company has entered administration does not make it worthless. A company in trouble can still have excellent technology or systems which may be worth paying for.
Or perhaps they have access to a particular market which may be very valuable to you.
If you’re sitting on a pile of cash, there will be deals to be had right now - not just with competitors, by the way, but potentially with suppliers as well.
You need to look out for them, because the right acquisition or merger could be a fast route to growth - very often, the fastest.
The key to making it work, though, is not random or opportunistic action.
Before investing in any other company, you need a clear idea of what you want for your company’s future so you can find the right opportunities.
Your own finances need to be in order. You need complete clarity on how much money you have to spend, and the potential financial implications of every purchase.
And you need to analyse opportunities properly, to make sure they’re a good fit and to ensure you’re getting the best possible deal.
That’s where we can help you - because as your outsourced finance department, our job goes so much further than “simply” getting your accounts done.
We’re there to help you make the very best financial decisions for your company.
You may or may not have an acquisition in mind right now.
But you’ll never be in the position to take such a bold step for your future, if your own finances are chaotic or managed shoddily.
You won’t have enough clarity about your own financial position… You may not get the loans you need to go ahead… And you may not have the information you need to judge whether you’re making a sensible financial decision.
If you’re ambitious for growth, you need to be able to identify and act quickly on opportunities (of all kinds) as they present themselves.
That takes outstanding financial management.
It’s how corporates operate, which is one of the reasons they have a competitive advantage.
And it’s the way you should operate, too, if you want to move from a £1-2 million turnover to £5 million, £10 million and beyond.
Call me today on 01279 647 447 or hit ‘reply’ to this email to get in touch, and discuss how we can help you get world-class financial management - and power your business ahead.
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