Remember the fable about the tortoise and the hare? While the hare was faster, the tortoise won by consistently moving forward.
The options for growing a business can be a lot like that. You can grow organically, which is often slow and steady like the tortoise, or go fast and acquire another company to build quickly, like the hare.
Unlike the fable, one growth method over another isn’t necessarily better — they’re just different. Whichever route you choose, though, you need to be intentional with your choice.
After the quarantine is over, acquisition opportunities will appear, but you and your advisory firm need to thoroughly prepare before you take this path or making a deal could harm your firm’s future.
Here are four steps to help you determine if you’re ready to grow through an acquisition:
1. Define and know your growth strategy.
This includes knowing the type of client you serve best, and what type of firm you want to be.
And trying to bring another firm onboard without achieving this first step will likely result in disaster as you try to merge two incompatible cultures.
Grow smart. Your decisions need to be consistent with the type of firm and culture you want to create.
2. Check for red flags.
If your firm aligns culturally with the target acquisition, you’re in an excellent starting position.
Before starting negotiations, though, research compliance considerations to be certain the other firm doesn’t have any issues.