If you own a business already, this post will MASSIVELY resonate with you.
Today I’m talking about what large corporations do to grow… and it’s a little-known secret down in the trenches of the small business world. (By small business, I’m taking less than $10 million in revenue.)
Let’s face it… if you have started a business and grown it to at least $500K in annual revenue then you have seriously bucked the trend.
According to Entrepreneur magazine, more than half a million people start a new business every month. That’s 6,600,000 per year.
And according to my friend and author of the e-Myth book series Michael Gerber, more than 96% of them will FAIL within 10 years.
If you are still trading then congratulations, you made it. But now isn’t the time to rest on your laurels… now’s the time to GROW.
I know… I know… Growth is hard. It’s hustling for new customers every single day. But what if there was a smarter way?
You need new talent to grow… I get it. It’s tough to hire, motivate and retain good people. What if there was a hack for that?
Your customers are telling you they want a new product or service. Now you have to design it, test it, build it, deliver it. Phew… lots of work, right? What if there was a faster way to do all that?
Even then, you’d need more working capital, right? Yes, there’s a ton of financing available for solidly profitable businesses, but it takes time to get to that point. What if there was another solution?
The answers to all FOUR of these obstacles are exactly the same…
BUY. IT. ALL.
As in… buy another business that’s going to give you all of this in one big move.
Listen, the big boys do it each and every day.
Amazon has been prolific at acquiring other businesses. It realized years ago that its book buying customers were also listening to books on a really cool subscription app. Did Amazon go to its R&D department and say “Go build one of these, then let’s figure out how to market it”?
No. It acquired Audible. It bought the technology, service platform, employees, customers, revenues and cash flows.
Then Amazon figured out — in order to (further) dominate its share of consumers’ wallets — it needed to get into an entirely new sector: groceries. Did it build supermarkets and figure it all out from scratch? Nope. It acquired Whole Foods instead. Simple.
Microsoft does the same thing. It’s acquired Skype, Great Plains Software, Navision Software (I worked on that deal back in the day!) and more recently, LinkedIn.
Microsoft figured out that a business-centric social media platform was key to continued growth. Did it build one? Nope. It bought LinkedIn for $26 billion in 2016.
LinkedIn itself realized that many of its users wanted to consume online training. So did LinkedIn create an online training platform? Nope. It acquired Lynda.com for $1.5 billion in 2015.
Apple is the world’s most valuable company, currently worth $2 TRILLION or 20X its EBITDA (the measure we use to value our deals.) According to the BBC, it’s bought more than 100 companies in the last six years, averaging one acquisition every three to four weeks.
Apple bought Beats Technology and Shazam in order to enhance its products with their innovations. Makes sense. In fact, CEO Tim Cook recently told shareholders his strategy is to primarily acquire “tech and talent.”
Why build a technology or team when you can buy one instead?
Facebook has also made many acquisitions over the years, notably Instagram and WhatsApp. Why?
Maybe because it could — but really because it should. Those two platforms had a service Facebook didn’t have and couldn’t be bothered to build, test and roll out.
American Express (AMEX), the perennial blue-chip credit card and financial services company, acquired Kabbage last year. Kabbage is an automated lending platform that helps small businesses with cash flow. AMEX’s customers told it they needed access to cash. Did AMEX build a fintech service? Nope. It acquired it.
I could go on (and on). But here’s the big takeaway for you…
YOU CAN DO THIS, TOO!
There’s no better way to level the playing field with big business.
You don’t need to hustle to add customers to your business… or stress about hiring quality people one at a time… or invent new products and services to meet customer demands. And you certainly don’t need to beg financiers for a capital infusion.
You can have ALL of this by acquiring another business… and I can show you how to do it through my Dealmaker Empire mentoring system.
Until next time, bye for now.