The Function of Mergers and Acquisitions in Small Business

There are a couple different functions which mergers have in the small business world, and if your company falls into either one of these categories, a business merger may be the perfect vehicle for ensuring long-term survival and possibly even greater than expected business growth.

Combining resources and strengths

One of the most common reasons to carry out a business merger is to create a stronger company than either of the two merging companies would have been on their own. With the combined resources and strengths of each individual company, the unified new business entity can be a much more powerful force in the marketplace. It’s also possible that a merger of this type can allow the new company to enter entirely different markets for the purpose of new growth and increased profits. Such a new and powerful company will generally be much better equipped to compete in the marketplace, and survive against the stiff competition of the business world.

Acquisition by another company

In some cases, it may be to your company’s advantage to allow itself to be acquired by a bigger, stronger company. When your company has some powerful business advantage that appeals to a bigger company, there could very well be a strong advantage in simply selling your company to the larger one, in order to maintain survivability. Of course this means you would lose some autonomy and business flexibility, but on the other hand, you would probably realize a significant profit from the transaction, and your company would continue on in some modified format. The key to making this work would be to make your company powerfully appealing in several ways, such as showing a strong balance sheet, having a strong grip on a specific market, staying current on all debt payments, and trimming off any non-profitable parts of your business.

Is your company considering a merger?

If you need the funding and financial support to conduct an advantageous business merger, you should contact the Qivist Commercial Loan Solutions to discuss funding options. We may be able to provide the financing you need in order to achieve the business growth that you’ve been seeking.

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