Mid-market businesses need three amortising and increasing pools of capital: cash, credit and investment, yet a great many I meet, don’t take sufficient care of their finances. They must forego one of their best acquisition-driven growth alternatives – unstructured business sales.
There is two distinctly different situations:
- Structured acquisitions, when a business is brought to your attention or you consciously go looking for it, and at the right time, you have sufficient capital and a compelling proposition for the seller (target acquisition or merger).
- Unstructured acquisitions, when a business is brought to your attention, the timing is unknown, your capital position may or may not be ideal, and yet you possess the means (liquidity) and volition to turn on your heels to create a compelling proposition for the seller (sale of a competitor, special situation, succession issue).
Do you go out to a late night social engagement with enough cash and credit cards in your pocket to choose the transport mode home, the time of your departure, and to “go with the mood” or must you always rely on finding a nearby ATM, scheduled public or private transport and be dictated to irrespective of the fun? Preparation and readiness trump planning!
