Two weeks ago I posted five reasons why it makes sense to grow by acquisition. Here are five more.
6. Spread your overhead over a much larger sales base so much of the added gross profit goes right to the bottom line.
7. Qualify for volume discounts with suppliers now that you’re buying more from them.
8. Get needed equipment that comes with nice things like customers, employees, cash flow and market share.
9. Demonstrate to future buyers that your company can successfully absorb another firm with out a loss of profits or market share. This is huge to larger firms and private equity groups.
10. Scaling the business gives you more options and a higher selling multiple when it’s time for you to exit. All other things being equal, larger companies sell for a higher multiple than small ones.