The SME space is evolving quickly…
And one thing which can impact the success of your exit plan is industry consolidation, through mergers and acquisitions.
M&A has become more common in the SME space and has the power to reshape your sector AND turbo-charge your own exit plans, through achieving a higher end-valuation of your business.
4 things to think about…
1️⃣ KNOW YOUR SECTOR
Of course, you know your sector. But the consolidation of similar types of businesses (before you exit) can be beneficial for SMEs operating in more fragmented sectors. So – understand whether you are creating more value from consolidating horizontally across similar businesses or vertically (as in up or down the supply chain).
2️⃣ VALUE CREATION
Bringing several businesses together can unlock value way beyond what each company could achieve individually. Often there are opportunities for cost savings, access to new customers, economies of scale, intellectual property and more – and it’s not always the obvious things.
3️⃣ PARTNERSHIPS BRIDGE YOUR GAPS
Navigating this world can be daunting for some SME owners. For others, it’s simply too time-consuming. But partnering with investors and M&A specialists with a track record in this area, can accelerate your journey and deliver a much better outcome.
4️⃣ SPOT THE TRENDS
Making the right decisions about how to use M&A is also about spotting trends. What is becoming more important to potential acquirers of your business? What is becoming more valuable? What capabilities will fetch the highest premiums?