Should you sell to one of the big guys?

Sydney Outsourced CFO Thomas Taylor - Tuesday, October 03, 2017

 

Is running your own show is the best way for you to grow? One option might be to join up with a bigger company.
 
There are some advantages that come with size:
- access to their bigger clients
- a well-known brand that will also get you access to new clients
- work referred by other parts of the bigger organisation - more sophisticated resources for sales and inbound marketing
- better, more efficient client, technology, administrative and HR support
- project and client management methodologies
- it might be easier to recruit good staff with a bigger brand
- working capital to fund growth (someone else to worry about the cash flow)
 
Plus, it can put cash in your pocket or may your shares in a much bigger company.
 
There are three main reasons that a company will pay money for you to join their company:
 
1) Clients: you’ve built a successful company and you and your staff have built great relationships with your clients. Clients of professional service firms build buying relationships with individual advisors. To get access to those clients, a savvy bigger rm will pay to get you and your key staff.
 
2) employees: Recruitment is getting harder and harder for larger companies and costs them quite a bit money. If you have a good culture and good people it’s often cheaper for a bigger firm to bolt on a group of people rather than employing individuals for the task one by one. Be careful here though, make sure the bigger culture is compatible: people issues and culture clashes are the main cause of merger failures.
 
3) Core Processes and Technology: For example a digital agency might want video production capability. If there is something you do really well, there is probably someone that wants to pay money for it.
 
Obviously there are risks; most of them around not being the only boss anymore but if you like working with people, and you make sure they are compatible, it could be a good move in the long run.

 

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