For many start-up companies, the dream is to one day become the other half in a merger or acquisition with a larger, more developed organisation. While this is a great dream to have, there are thousands of businesses offering the same or similar products or services as yours, so you’ll need a competitive edge to turn this dream into a reality. Whether your start-up involves providing a service or your planning on selling a product, it doesn’t really matter – and it also doesn’t really matter what you’re selling or providing either.
If you want to turn your start-up into an attractive acquisition target, there are a few key tips that all small companies should remember:
Fine Tune your Management.
One outstanding quality that will be remembered and admired by prospective businesses is a professional management system. Tripp Braden, from ‘Developing Serving Leaders’, says that “Over the years, [he’s] discovered that the more professionally managed the firm is, the more likely it is to exceed sales of ten million dollars”. One tip that all business owners beginning a start-up company should remember, is that your staff and their capabilities need to grow as your company does.
Stay ahead of the Game.
While this may seem like a pretty obvious tip to give, in any aspect of business, staying one step ahead of your competitors will be incredibly advantageous. Successful businesses often look at what is booming in various sectors currently and make calculated predictions to what will be successful in the future. Currently, all things technology based have a high acquisition rate if they can provide a service for a wide range of emerging technology markets.
Build Strategic Partnerships.
Like the saying goes, ‘networking is everything’ and it’s all about who you know. Tripp Braden gave a great piece of advice to those venturing into a start-up business, saying “no matter how innovative an organisation is at the early stages, they require a significant partner to enhance their brand within key larger accounts”. Finding a partner that melds well with your existing business plan and internal infrastructure will help in ensuring that your partner enhances your performance, without hindering it.
Be the First to Market.
Looking to the rest of the world can often give you an insight into what the next big thing will be, particularly if you are in a region other than the US or Europe. The latest craze of electronic cigarettes, for instance, is continually growing throughout the world, after showing great results throughout Europe and the US. Start-up company ‘Blu Cigs’ was acquired by Lorrilard, one of the oldest continually operating tobacco organisations in America, for the impressive figure of $135 million for the merger. Since seeing the success that Blu Cigs and various other electronic cigarette companies have had, a number of promising start-up companies have surfaced, including UK based BLACKHAWX, who is currently introducing their products to countries outside of the saturated US & UK markets.
Get People with the Goods.
If you really want your business to succeed, it is just as important to find a talented team, as it is to have an innovative product or service to offer. Braden says that start-up companies must “invest at least 25% of [their] time and energy attracting and retaining key talent for [their] organisation”. One great way to ensure that all team members are getting the most out of their role and also giving their best to your company is to set up various targets and even mentoring programs that encourage them to succeed. Give praise when praise is due and make sure that your team is made up of quality people who have drive, motivation and suit your company’s core values.
It sounds like a lot of hard work and man hours, but if you do manage to build a successful start-up that peaks the interest of larger companies, landing an acquisition will make those sleepless nights worthwhile. Always remember, invest the time in your team, stay ahead of the game and above all, implement a management system that thrives on professionalism.