Strategic Acquisitions Can Help Your Business Thrive in a Tough Marketplace
Last week, Numo, Fire Enterprises (FEI) Head Accountant, told the FEI tribe why inorganic growth strategies are essential to FEI’s continued success. This week, Numo shows the tribe how strategic acquisitions can help their fire business grow. Remember, fire=print.
“Where were we?” Numo asked.
“You were about to give us an example of a fire company that’s grown using ‘inorganic growth’ strategies,” said Org, who was piqued by the idea but anxious to see how it worked in the real world.
“Of course!” Numo said. “Zoot, hit the lights, please.” Zoot turned off the lights, Numo turned on a projector, and the following words appeared on the wall behind him.
Inorganic Case Study #1—Freddy’s Fire Grows Through Acquisition
“Freddy’s Fire Emporium,” Numo said. “Ever heard of them?”
“Sure,” Zoot said. “They’re about our size but they’re way down on the island of Carpathos, and they mostly serve island-based companies. They’re not much of a competitor.”
“A few years back, Freddy’s acquired Casos Fire & Torches, a business with two locations on the nearby island of Casos,” Numo explained. “The first location had fire-making capabilities that were pretty similar to Freddy’s, so Freddy’s simply merged that location into theirs. The second, however, had short-run torchmaking capabilities, which Freddy’s didn’t offer...until now.”
“That all sounds fine,” Org said. “But what’s the bottom line? How are they doing today?”
“Since acquiring Casos, Freddy’s Fire has grown its top and bottom lines by more than 10 percent each year,” Numo said. “Through this acquisition, they grew their employee size by almost 50 percent, diversified their product line, and expanded geographically...all accomplished during an uncertain business environment.”
“You may be on to something here,” Org said.
Numo turned to Zoot and Marka. “What do you think, guys? I’m not saying marketing and sales aren’t important anymore. Actually, they’re more critical than ever. But these activities are now the baseline we must execute. Inorganic growth strategies—like acquisitions—are what will set FEI apart.”
Marka and Zoot decided they’d make Numo sweat for a moment. Then, they both said: “We love it.”
“Marketing can’t do it all,” Marka conceded.
“Neither can sales,” Zoot said.
“Why, Zoot,” Numo teased. “Was that a humble comment from you?”
“Guess there’s a first time for everything!” Zoot said.
Next week: Numo presents another inorganic growth strategy.
Today’s FIRE! Point
Strategic acquisitions can help your printing company continue to thrive in a declining market.
FIRE! In Action: Print Finishing Company Makes A Strategic Acquisition, Creates Win-Win Relationship
Two years ago, a West-Coast-based finishing company acquired a four-employee die making company. The die-making company has thrived as an integral new division of this business: In 2012, it increased sales 50 percent from the year before. With the die-making company part of its business, the finishing company has created operational efficiencies and grown its revenue the past two years.