Selling or Buying a Small Business/Acquisitions.
Do you feel that a small business owner
after 9 years should approach a MNC so that a acquisition takes place with the MNC acquiring the co if the small business
Owner is finding difficulty in getting more business?.
Thanks & Regards
Prashant s Akerkar
Hello, Prashant, and thank you for your inquiry.
Your question is very general, without much of any background information, so I can only approach it as such. If you are referring to MNC being a multi national corporation, then I can say that yes, that would be one alternative out of many alternatives. I do not have enough information to know why that one path is your main interest.
Difficulty in getting more business relates to a problem with sales and marketing of a product or service (or of the product or service itself), and this is not an uncommon problem in business with any type company. Especially smaller companies do not have the staff or expertise in sales and marketing to continually build the business, and the owner cannot personally handle all functions effectively. If the difficulty in getting more business causes the company revenue and profit to begin falling, then the company becomes less attractive to a buyer.
Obviously, buyers of any size want to buy a company that shows a steady growth curve with an upward trend in revenue and profit. Various points along that upward curve can be ideal times to offer the business for sale. Once it begins dropping, it can easily be assumed that there is some type of problem that has to be fixed, in order for sales to again increase. Sometimes being acquired by a larger company can solve the sales and marketing void because it is more likely to have a staff or department to handle these functions. However, if it does not, or if it is in an entirely different industry, it may appear to be too much of a challenge to take on.
Also, as a business grows, it goes through various levels of revenue and profit. Going up into the next level usually requires more work, more energy, more ambition and more capital invested. This often gets to a point where an owner simply becomes tired of pushing upward and going through these stages. Additionally, having to invest more capital to go up a level often results in a temporary drop in profit until the business again stabilizes. So, the ideal time to sell is near the end of any specific growth stage with profit being maximized, prior to trying to move up to a higher level.
So, at any point in time where you are considering your choices, it is critical to know how "marketable" your company is---it's attractiveness to a buyer. If it is not deemed highly marketable at that moment, then it can be a waste of time, and frustrating to find yourself having to negotiate a price far below your comfort level to make a sale. And, if you appear desperate, buyers can easily become scared and suspicious.
I hope I have addressed your question on the limited information provided, and have been of some help.