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Category Archives: Selling a Small Business

How to Win in the Midst of an Industry Consolidation

By | Business By The Book, Exit Strategies, Growth Strategy, Organization & Strategy, Selling a Small Business | No Comments
Big Fish Little Fish

Industry consolidation is the process when a few companies start buying up other companies in the same industry and the number of competitors in an industry shrink dramatically. The main goal for the consolidators is to grab market share, cut costs, boost productivity, and improve investment returns through scale economies. I’ve studied industry consolidation in business school, participated in a few industry consolidations as a consultant, and I founded a company in my current portfolio to take a lead role in consolidating its target industry. Industry consolidation is almost inevitable: over time, most industries will consolidate to where the largest three…

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Expect Negative Surprises When Acquiring a Business

By | Accounting, Business By The Book, Business Development, Buying a Business, Financial Reporting, Growth Strategy, Investing in Small Businesses, Negotiations, Ownership & Purpose, Selling a Small Business, Valuing a Small Business | No Comments

Some aspiring entrepreneurs will get started by buying an existing small business and many business owners have growth plans that include buying up other businesses to add larger chunks of growth via acquisition (mergers and acquisitions or “M&A” growth as opposed to “organic” growth). And if you are a business owner, you will most likely at some point sell your business. So here’s a few tips to both sides of the transaction… While it may not be statistically significant in terms of all the deals ever done, in my experience of negotiating with roughly 300 prospective sellers, signing approximately 75 letters…

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