The number one reason for buying any business is you are able to acquire value faster that what it would take for you to build it. There are usually always deals that can increase your sales and profits by acquiring a company. In a turbulent economy there are usually more opportunities than normal.
If you are a business expanding through acquisitions, there are also economic benefits of combining functions that can successfully support a much larger business. Typically systems support and administrative functions can be streamlined to reduce the expense structure.
There is no value to economic streamlining of the cost structure if the immediate attention needed on the customer base is ignored. Consider this example: you are business who has had a service relationship with a certain suppier for say 5 years. Now the supplier is purchased and the customer service support structure changes and the reltionship is weakened or lost. (Do you know anyone who was a Nextel customer and has a postive story following the acquisition by Sprint? ) Without an laser beam focus on customer retention, the economic gain of administrative synergies following an acqusition are soon wiped out.
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What does this have to do with divestitures? When you prioritize your resource allocation, sometimes it makes a lot of sense to sell a product line or division. If a part of your business is divertiing your attention from your core, selling it should be considered. As for selling the entire business the reasons are many and will be covered in a separate report.
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If you are considering divesting of part or all of your business, I highly recommend contacting a firm that will give you independent council on positioning the sale. You will want an objective evaluation of the strengths of what you are selling. Often I find opportunities strenghening the performance of the component targeted for divestiture. My most notable success story was helping a company achieve double their asking price. The value of that increase was $850,000 and that was achieved in less than three months of work while negotiatiing the sale.
I have in process a report on The Key Issues That Must be Addressed Before Selling All or Part of Your Business. Click Here to send me an email to let me know of your interest and I will send it to you when it is released.
Buying or Selling An Internet Business or Domain Names
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Steve Pohlit, www.StevePohlit.com
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Steve is the President of International Business Consulting Resources. His firm specializes in guiding companies to rapid increases in revenue and profits with a sustainable growth rate. Don’t miss my FREE Report: How To Make More Money With Your Business Now and Long Term I am building my practice and welcome new client inquiries. Call me for a fee consultation at 727-587-7871
This report may be freely distributed without restrictions with the original content including this resource box remaining unchanged. Author: Steve Pohlit, Business Consulting Services, Executive Coaching, please visit www.stevepohlit.com
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