How To Buy A Business That’s Expanding Faster Than You Can Say “Go”
Businesses in many industries have been struggling to keep up with demand, with one exception: a few large tech companies.
For years, technology companies like Amazon, Facebook, Apple and Google have been taking the lead in driving the rapid growth of businesses around the world.
Now, they’re also finding that a few major tech companies like Uber, Airbnb and UberEats have grown exponentially in the last few years.
While the growth in the tech industry may be slowing, it’s still outpacing traditional business sectors, like agriculture and transportation, according to data from Euromonitor.
Here’s how to buy the right business for you.1.
Look at a company that is already doing well.
In some industries, the big growth has been in services.
Companies like Netflix, Airbnb, AirbnbEats and Homejoy have seen massive growth in recent years.
In fact, Netflix now has more than 2.5 million paying customers in the United States, according the company.
And while these companies are not a monopoly, they do have the advantage of having a massive market share.2.
Look for a company with a clear path forward.
If you’re looking for a business to get started, look for companies that are already growing.
“I’ve been in the industry for 10 years, and it’s not been easy,” says Paul Mair, managing director of strategy at Euromonitors.
“A lot of them have struggled to grow, and there are a lot of ways to get out of it.”
The good news is that many of these companies will find that their businesses can thrive without a large investment.
For example, if you are looking to get into the online grocery business, there are some companies that have already proven their growth through acquisitions.3.
Ask yourself whether your business fits in the right categories.
If a company is not the right type of business to start, you may want to rethink your strategy.
For instance, if a company doesn’t fit into the areas of transportation, logistics or technology, it could be better to focus on other areas.
For more advice on buying a business, see our top picks for tech start-ups.4.
Look into a small business.
“Small businesses tend to be the ones that have the biggest opportunity to grow in terms of potential,” says John Sauerland, chief executive officer of Euromonner.
“They have the best track record.”
There are plenty of small businesses in the US, which are also the most likely to be able to attract new talent.5.
Check the size of the company, not its valuation.
Some of the biggest tech startups, like Airbnb, have raised billions in capital, but the valuation of those companies is typically much higher than their revenue.
For a start, they can often take years to raise money and, in the end, they’ll never have enough cash to invest in new technology.6.
Consider how fast you can scale.
Companies that have a high level of profitability are likely to have a rapid pace of growth, which means that if you’re interested in buying a company, it will be hard to find a better deal than what you can get for less than the market value.7.
Try a small startup.
“If you’re in a market that’s really struggling, look into starting a small company,” says Mair.
If the market is weak, it can be a good idea to look for smaller companies that can grow quickly and have a strong customer base.8.
Take advantage of a competitive market.
If there is no obvious competition, it may be worth trying to acquire a company in a different industry.
For some startups, that could be a challenge.
But for others, it might be worth looking for companies with a strong business model and good financial backing.
“You might think you have to go after the big boys, but they can’t keep up,” says Sauerl.
“The reason I look at this differently than a lot others is because a lot more people are interested in the small guys.”