The Growth Ceiling And How To Break It

“Our strategic plan calls for us to double our size…” I hear it often. As a plan, it’s usually very successful in

doubling the stress of frustrated executives. By massive efforts to improve products and smarten the marketing, they can get revenues from $100 million to $125 million. But $200 million? They pay lip service to the dream of “doubling” but in their hearts they know it’s a pipe dream.

Which it often is, if your only engine is organic growth — that’s to say, growth from the inside of your current operations.

The missing piece here is M&A. In many cases, the only realistic way to hit that major goal is growth through acquisition. So why don’t more companies look to M&A as a serious strategic component?

Often the reasons are quite practical and mundane. Nobody has the time for it. The idea of an acquisition gets tossed around, and it looks quite sexy. But who will get in trouble for not pursuing it? Whereas a failure to lift those sales numbers, or shave that margin, or accelerate that product line, can hurt your career.

Pushing the envelope of organic growth can consume all the time and energy a company has, and leave nothing to spare for M&A — ironically, the potential engine for massive expansion.

One possible solution: enroll a third party to lead and manage your acquisitions program. You’ll still have to invest some internal time and resources, but the burden shifts to an outside expert and it will be their job to push the M&A program forward.

Leaving you time to squeeze another inch of growth from your existing business.

This post was contributed by Capstone’s Managing Director, John Dearing
Photo Credit: Graham C99 via Flickr cc

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