Business Combinations Can Work for Small Business

In my last post I suggested that small businesses should consider the use of business combinations as a means of growing their business and reducing their risk. Mergers and acquisitions, or “business combinations”, are usually thought of as a tool that large companies and investment funds use to create mammoth enterprises. We rarely think of small businesses (SMBs) as engaging in M&A activity, but for many, it could be a very valuable strategy. In this post, we are going to talk specifically about how SMBs might use a merger strategy to build a larger, stronger and more secure business.

As we all know, being a small company entails a lot a risk for business owners at both the business and personal level. It is difficult to get adequate financing without risky personal guaranties. You can’t afford innovation. Larger competitors can leverage their costs down below yours. Personnel and regulatory matters take a disproportionate amount of your time. You want to grow your business in order to reduce risk and compete more effectively, but there are so many obstacles.

One solution for growth is to merge your business with other companies that may be similarly situated. Right now you are thinking: “Wait, that’s way too complicated”, but it’s probably a lot less complicated than you think. You will need a good lawyer and a good appraisal of the value of each business, but the transaction itself can be very straightforward. The hard part is identifying the potential companies with which to merge.

Keeping the deal simple will help to control the costs and fees incurred to get the deal done. A simple combining of the participating companies into a new entity (or holding company), with each of the contributing shareholders receiving new shares in proportion to their contribution, based on a valuation method that is consistent across all the companies, is the best approach in my opinion. After completing the combination, the new entity should be able to significantly reduce the combined overhead, effectively increasing the share value of each participant.

Of course, the key to a successful combination is finding the right company, or group of companies, with which to combine. Here are some of the factors that I consider critical:

1. Product diversification. While it might be easier to combine companies that do the same thing, it wouldn’t do much to reduce product risk, which is often a big problem for small businesses. A better approach would be to look for companies that have industry compatibility but different products.

2. Geographic diversification. Again, it may be physically easier to combine companies in the same market area, but it might not do anything to reduce market risks. If you combine companies in multiple markets, you have an opportunity to cross-train sales forces and increase market reach for each product.

3. Personal compatibility. For most, it’s not easy going from being the controlling shareholder to being part of a group of controlling shareholders. In the discussion phase, you want to look for partners that have a similar strategic and personal vision for the new entity.

4. Real improvement. The proposed combination should result in better opportunity and reduced risk for the participants. For example, a combination of two companies with revenues of $200 thousand each is probably not going to represent a significant improvement in circumstances for the participants, and could even result in increased overhead. But a merger of four companies with $5 million each in revenue could result in significant overhead reductions, product and geographic diversification and increased borrowing capacity.

Remember, it’s not about size. It’s about building a better underlying asset for the shares that you own. A smaller piece of bigger and stronger pie. The idea of a merger is not right for everyone. For some, the notion of giving up absolute control is not acceptable and that’s fine. But for others, the business combination may be just the right answer to achieve business growth and reduction of business and personal risk.

Link Building Companies to Help You Expand Your Business

With competition growing stiffer each day, you would surely want to outdo your business rivals in all possible ways. A website is extremely important for business to flourish. Hiring a reliable company which offers SEO and link building services can help you attract more customers and clients. Online business depends a lot on the inbound links, and you should have more of them to get the best out of it.

Just placing links anywhere on the internet will not help you. Thus, you will have to identify the areas where from you can attract the maximum prospective customers, and have your links posted only in such places. There is no point in placing your website links in places where your targeted audiences do not visit. You need quality links, and this is the most important reasons why you need to hire efficient link building companies.

If you post your links at undesired places, it will be a total waste of money and time. For example, you just can’t have your website links selling garments under the insurance sections. SEO and link building services helps in promoting your business at the right places.

Good link building companies also develop websites to make them easy for the search engines to find. Results can be maximized by adopting appropriate solutions for back linking. These companies analyze and search for keywords, which are related to your business, and then use them in your contents.

A lot of people think that hiring link building companies is pretty expensive, but the fact is that there are a lot of such companies who offer their services for cheap prices. There are plenty of benefits of hiring professional SEO and link building services. Some of these benefits are given below:

  • They are experts who know various SEO processes and strategies to help your business grow.
  • These companies have a team of dedicated professionals, which saves your time. You could dedicate your time to improve the quality of your services or products.
  • They offer guaranteed returns on your investments.
  • They help in improving the credibility of your brand.
  • The website gets acknowledged by search engines which help you in getting more customers.
  • The approach of your business becomes more fruitful and focused.

It is natural for people to think that cheap services don’t work as effectively as the overpriced ones. Now it is a mere speculation. The only dissimilarity is that the expensive companies ask for a lot of extra money to do the job that can be done for cheap. Some of the services rendered by affordable companies are:

  • They identify relevant and useful websites to post your links
  • Your web pages are optimized for making it search engine friendly
  • These companies develop campaigns around reciprocal links, two way links, inter linking structures, one way links, and back links.
  • Your website is constantly monitored by them. They even review and modify your websites if there are any broken links.

Invest in Sash Windows Before VAT Increases

As the weather improves and summer slowly rolls across the country, party leaders from all over the political spectrum are flitting to and fro in search of support for the upcoming 6th May election. And while there are hundreds of issues to address, the problem of VAT is an increasingly important topic for those home owners considering sash windows for their home. As each day edges Britain closer to what experts are calling the closest election race in 20 years, homeowners would benefit from looking ahead and planning home improvements now.

While the Conservatives are denying rumours of a planned VAT increase, and the Liberal Democrats are insisting their plans do not require a VAT hike, the Labour party under Gordon Brown has made no effort to guarantee the current rate of 17.5%. In fact, Brown’s people have even hinted that rises could see the rate at an astonishing 20% in the coming years. This means that those home owners who missed out on sash windows when VAT was 15% should consider striking while the iron’s hot and investing now.

Granted, window suppliers are experts in quality PVC-U, hardwood and softwood luxury sash windows, not politics or finance. However most have recognised that the prices of raw materials for all construction trades have been rising steadily in recent years due to climbing fuel costs. With diesel reaching over 120p per litre at the pumps, transport companies are charging more and more to transport raw materials. Overall, this means that consumers looking to invest in an exquisite range of sash windows should act now to avoid being trapped in future by escalating costs and high VAT.

Poor windows can hinder sales too. If your windows are at odds with your property or have fallen into disrepair, being unable to change them in future due to higher costs could stop you from selling.

Though customers can rest assured that reputable firms will do everything they can to make sure their customers receive quality sash windows at a reasonable price, unfortunately without a window to the future, no one can truly know what’s in store until after the 6th May election.