Mergers and acquisitions are when two small companies come together to form a large company. A merger is usually done to create a value greater than the two companies alone could produce. Companies that are struggling also participate in mergers or acquisitions to keep their businesses from going under. Some different types of mergers and acquisitions include:
- Conglomerates. Conglomerates are when two companies that share no common business areas merge.
- Horizontal mergers. This is when to companies that are in direct competition with each other merge to share markets and product lines.
- Vertical mergers. Vertical mergers are when two companies with slightly different but related product lines and markets merge.
- Reverse mergers. This type of acquisition is for private companies who wish to be publicly listed. A private company must buy a publicly-listed shell company to become a new public corporation.
Reasons for Merging
Some factors that may motivate a company to merge include:
- Economies of scale. The larger your company is, the more cost effective it will be to purchase supplies. Merging can also mean more purchasing power and the ability to negotiate prices.
- Improved market reach. Combining the resources of two companies can mean new markets and sales.
- Staff reduction. When two companies merge there will be a surplus of staff in many departments. Mergers often mean job losses for employees.
- To acquire new technology. Buying small companies with unique technology will allow larger companies to stay competitive.
To learn more about mergers and acquisitions, read this informative guide.
For all your small business needs contact the Winflow Financial Group at 1.800.956.6897.
After you have started turning a profit and your start-up problems are behind you, its time to start thinking about growth. The growth of the company is an important aspect of reaching business goals, expanding markets and increasing sales. Some ways to grow your small business include:
- Implement new business processes. Find ways to take advantage of your leftover resources, find new suppliers or optimize your distribution to grow your business. It is also important to improve productivity and the efficiency of your administration team.
- Expand into foreign markets. Start by researching out potential customers and exporting costs. Find countries that have markets that need your products. A great resource for market research is the Country Insights page provided by the government of Canada. It tells you about the history, economy, culture and politics of any given country.
- You may want to consider buying another business or forming a partnership with someone who can bring new resources to the business. To learn more about buying the right business for you, read “Buying a Business: Choosing the Right Business Type.“
For more ideas on how to grow your business visit this Canada Business page.
Business to business (B2B) interaction is when your company works together with other businesses and other wholesale buyers to provide specialized product lines, expand your markets and deal with manufacturers. With the recession, B2B marketing is less effective because there are less customers. To make the most out of your B2B marketing during times of financial crisis, consider the following:
- Optimize your landing pages. Your landing page is where the customer first enters your website. A good landing page can prompt customers to continue exploring your site which can lead to sales. A poorly optimized landing page can increase your bounce rate sending your business further down Google searches.
- Integrate your marketing and sales teams. The Internet causes buyers to begin interacting with your marketing campaigns before they ever speak to a sales representative. By streamlining these teams you may be able to create a single revenue pipeline.
- Focus on building relationships with customers you already know. Finding new customers costs more money than keeping the old ones happy. During a recession, remember to market to returning customers over new ones.
For more tips on B2B marketing, read this article.
If you would like to learn how B2B marketing can help your business, call 1.800.956.6897. Our consultants at the Winflow Financial Group will determine how to best increase your marketing and sales.