Inorganic growth, meaning acquisition, is a fantastic way for agencies to scale. However, you can’t do it before you’re ready. You can’t acquire someone and assume that they’re going to fix your process. Think about these three things before you make an acquisition.
Number One: Is this a strategic fit for me? Buying revenue doesn’t make sense unless you’re really big. For most of our human sized acquisitions, you have to buy strategy not revenue. It’s crucial to buy a piece that you don’t already have.
Number Two: You cannot imagine that the customers of the company you plan to acquire will stay with you. People don’t like change. Even if you’re the most magnanimous, generous, delightful, business owner, the clients and customers of the acquired company are likely to leave at some point, and that can be disastrous.
Number Three: You have to make sure that the acquired company’s culture fits with yours. If you don’t have a culture match, your acquisition will fail. Acquisitions where one plus one equals three only happen about 25% of the time. Most of the time it’s one plus one equals one and a half.
