Acquisitions Are A Game-Changer: 3 Ways To Help Ensure Your Business Has A Winning Shot

In basketball, players are traded quite frequently. A player is less a person than, an asset.

His value rises and falls on the market according to performance and demand; one team might want to sell him, whereas another team or two may want to acquire him as soon as possible.

In any acquisition where millions of dollars may be at stake, there are three essential factors every business owner must consider before signing on the dotted line.

1. Strategic Assessment: An acquired company brings a new customer and product set to the acquirer. New customers can be very valuable to a company weak in diversification.

A company can gain financial advantages, increasing profits and cash flow, a rise in market share, and all around growth, expansion and prosperity for the business and the newly acquired areas.

2. Financial Assessment: It is important to judge the risk reward and inherent returns in any acquisition. The NBA has a cap, where a team can only spend a certain amount of money on players each year.

If a team were to acquire a player who is slated to make $25 million dollars in their first season, they would have to evaluate whether this would be beneficial to the team’s bottom line. An acquisition, both in the business and the sports world, can result in revenue and profit growth.

3. Organizational-Culture Assessment: If leadership is strong and the acquired company is responsive, then success will likely ensue. However, if the newly acquired organization has not bought into the leadership and growth strategy of the company, the acquisition can be undermined.

Any acquisition whether it be in sports or business, has its risks and rewards. Many factors need to be weighed.

However, as long as the benefits outweigh the risks by way of product or service diversification, an increase in profitability or global reach and corporate leadership remains supportive and strong, it is more than likely that success will ensue.