When you find a company that is a good fit with your own core values and culture, spend time getting to know them before you expand your business.
Scaling up through acquisition is a strategic model for growth if approached in the right manner. Acquiring companies has allowed ENCON to jumpstart growth and expand into a whole new market sector.
My father, Marty, founded the company in 1968 and when I took the helm as president in 1999 I was fortunate that he empowered me to run with my vision for modernizing the business so we could successfully evolve and expand.
I’ve found one of the most important aspects of acquisition is “dating” for a while to determine if the company, owner(s), team members and culture are symbiotic with our culture and core values.
Over the past 20 years, I’ve engaged in dozens of these conversations; I know what to look for and I proceed cautiously. It’s vital to take your time and follow your gut about whether the business is a good fit. There are so many factors that weigh into the decision.
A key to acquisition is spending a lot of time with the business owner to understand their philosophies and core values to ensure they’re in alignment with your vision. Otherwise, it simply won’t work.
For example, if they only care about the cheapest price instead of providing best-in-class service — which is one of ENCON’s core values — then we’re not going to be a fit.
When there’s enough time put into an acquisition, it can work well. My advice: date before getting married. Before venturing down the acquisition path a business owner may want to consider a few key factors:
- Why are you looking to expand through acquisition?
- What’s the real reason behind it?
- What assets would the ideal business bring to your company?
- Does the business fit into your overarching vision for your company?
Until you’re in the seat of owning a business and signing the front of the paychecks, it’s impossible to understand the pressure that ownership entails.
I’ve found your best employees are often those who previously owned a business because they get it. They understand the value of all facets of running a business because they’ve been in my shoes before and they can relate.
The acquisition will provide a better life for the former business owner because they’re getting rid of the business-related factors they’re struggling with. We help them thrive and focus on their strengths. Ultimately, they can let go of certain areas of the business that were weighing them down and detracting from their success.
It’s been a year since we acquired a company that enabled us to expand into a new market sector. The former business owner recently told me it’s gone even better than he could have imagined a year ago.
It’s allowed him to work on the aspects of the business that he’s passionate about, while our team took over the parts he disliked such as human resources, billing and the back office necessities that are essential to running a successful business. He still has another 20 years left in his career and he’s back to doing what he enjoys as a result of our partnership.
The timing of the pandemic in March of 2020 coincided with the acquisition of his company. It ended up allowing us to provide stability for his team who may have otherwise been unemployed during COVID-19 had we not acquired the business.
A positive aspect of scaling up through acquisition is the internal organic growth that the business you purchased will bring with it because the business owners’ clients will likely follow them. If it’s a mindful, strategic alignment, then the business owner will vet its clients in advance to set up a smooth, successful transition.
Another benefit of acquiring an established company, is you inherit the unique talent and skillsets of the brand’s team that would otherwise take you years to find and cultivate on your own.
The final aspect I consider when we acquire a company is how will we instill and maintain our culture while we grow. We have built a legacy of trust, client care, collaboration and best-in-class service over the past 50 years. We create the best place to work by valuing our people, embracing team and individual ideas. We have cultivated an atmosphere where our employees became part of the ENCON family.
In the last year, we’ve gone from 80 to 140 employees and as our company grows it’s important to maintain our core values. In this COVID-19 world, we don’t see our team as often so we are trying to transpose our values and remain connected on a human level.
Scaling your business via acquisition is a smart business model for growth if done in the right manner.