Bob Forsyth, the Managing Director of MITIE Total Security Management (TSM) introduces his seventh blog on Infologue.com. Bob writes: “In my last blog I talked about integration and my view that delivering great service alone isn’t enough for a business to really succeed. Taking that thought a little further I’d like to explore the business advantages of acquisition vs organic growth.
So what is the best way to grow your business?
Organic growth is a result of consistently good business performance, something which is achieved through the right business model, great service and product/service offerings that meet the needs of your target market.
This growth is an indicator that as a business you are performing well, however there may come a time when you want to accelerate this growth; access a wider customer base to increase your market share; obtain a workforce with additional skills and knowledge of a different sector thus giving you a competitive advantage; or you may be looking to diversify your products or services – this is where more than great service is needed.
When considering making an acquisition I would say the main consideration should be the type of business that would make a good acquisition, what advantage will you derive from the purchase and is it a long term fit.
Our industry has seen a huge change over the last five years, and the providers that are succeeding and have a sustainable future have evolved to meet the challenges, therefore is there any value in acquiring a business that won’t give you any diversification or ability to innovate?
This may meet an immediate need to increase market share but you have to be able to take control of this business quickly and have a strong culture to make a quick positive impact on that customer base to retain and build client satisfaction.
For me growing the business through acquisition is not about increased market share but more to enhance capability in different sectors and specialisms and offer wider service options.
I’m a fan of the saying, “if you do what you’ve always done, you’ll get what you’ve always got” and with the security needs of our clients’ changing, we can’t afford to stand still and must look to expand our knowledge and capability for innovative security service delivery which will encompass acquisition.