With the economy in its current state, interest rate and inflation concerns, ever increasing energy and crude oil prices, concerns over the war on terror, and market variability as prominent concerns for many investors, venture capitalists, entrepreneurs, and small and medium sized business owners, addressing the concept of corporate growth is undoubtedly on the minds of many individuals. A highly recommended means of growing your small to medium-sized business in such an uncertain economic and geopolitical environment is through “Organic Growth”.
It is often thought by executives and other senior management personnel that mergers and acquisitions are the main drivers of corporate growth. However, when examining this route, one should consider other aspects of the transaction aside from simply focusing on being larger or having an expanded product line and/or footprint. While such benefits as expanded product offerings, increased customer base, enriched client lists, greater geographic coverage, and the opportunity to earn additional revenue for the firm are all potentially possible when it comes to mergers and acquisitions, it should also be noted that such detriments as poor financial performance, debt obligations, legal disputes, and investor/shareholder/stakeholder concerns are also potential inheritance from a merger and/or acquisition.
Such detriments have certainly turned out to be benefits in the long run for some (particularly for those executives and senior management members who are masters of the turn-around) and in some cases are viewed as benefits from the onset by some executives and members of senior management. However, such issues as the potential negatives associated with mergers and acquisitions have led many small and medium sized business owners to focus on “Organic Growth” or growth from within the firm which does not rely on mergers and acquisitions as a means to expand the firm, but relies instead on internal resources and capital to expand, grow, and enrich the organization.
The following series of tips, if followed in order, may greatly enhance the probability of success for the formulation, implementation, and execution of an Organic Growth initiative.
Justin Gates, MBA
Special Projects Manager
United Information Technologies (UIT)
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Article Submitted On: June 28, 2006
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