Inorganic business growth

Organic and inorganic business growth

The usual way of growing a business is in an organic way, which is sustainable.

There is an alternative, the inorganic way, which can also be sustainable.

In this video, I explain how this is explored with a client.

Organic and inorganic business growth: The Desai Despatch – Episode 21

(JK) Well, I guess one of the things that could be a consequence of the pandemic is that although certain businesses are moving forward and have dealt with the various issues coming out of the pandemic in a very good way.

However, there are other businesses who have kind of fallen fallow a little bit and are in trouble.

Do you have examples of this kind of situation where maybe businesses sort of getting together?

(FD) Yes, so as you mentioned, usually businesses will grow organically.

They are looking at

  • how to increase their turnover,
  • how to increase their profits,
  • what marketing strategies shall we implement,
  • what sales strategies should we implement?

That is all fine, but there is another way, which is the inorganic way, which is a quick way of growing a business.

Somebody might think, well, if it’s quick, it might not be sustainable.

Instead, it actually can be sustainable if it’s done in the right way at the right time and with the right business model and if it is the right strategic fit.

What I am talking about is acquisitions or mergers.

As you mentioned, some businesses are not doing so well, so they might be acquired by their competitors. That is what I have suggested to one of my clients because, in their market, a couple of their competitors they know are in trouble.

It is something that they haven’t really looked at before and it’s not really been on their radar because they have just been concentrating on the organic growth, which is, as we know the long term sustainable way of growing a business.

They are looking into it and hopefully, they might find maybe one business that they may be able to acquire.

I think it is a novel idea for them, but they are quite excited.

(JK) I guess it is quite a big deal for a lot of businesses.

What is the single factor, let’s say the most important factor that you would say a business should consider before actually going ahead and making approaches?

(FD) So the key thing is that it has got to be a strategic fit.

There is no point in acquiring something for the sake of it, even if it is in the same market. If there isn’t a proper fit, if the business model doesn’t work and it is not going to be seamless once you acquire. There is no point doing it for the sake of it.

But it is something that should be on the radar of a lot of business owners and businesses. It is something that should be in their long term strategy.

I would always say keep a lookout, always keep a lookout, because you just never know what you might be able to get.

 

Does this resonate with you? If you would like to book a complimentary, no-obligation, coaching session to discuss this further, please email me at falgunidesai@actioncoach.com