Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Buyers are demanding greater growth in the companies they consider acquiring. Your company could have 85% profitability, but if your growth rate is anemic you will still probably get passed over for a company with aggressive growth. Below is a quick-and-dirty list of how buyers are viewing growth this year for both the growing-market niche and the mature-market niche.
Prime acquisition targets: History of minimum 200% annual growth rate.
May consider if desperate for a company in that niche: History of 50% to 200% annual growth rate.
Forget this dog: Growth rate below 50%.
Prime acquisition target: History of minimum 100% annual growth rate.
Maybe consider if desperate: History of 75% or greater annual growth rate.
Forget this dog: Growth rate below 75%.
Why the higher growth percentage for a dog in a mature market? It is so much harder to acquire more customers and sell more product in a mature market that the buyer cannot recoup the investment within the target time frame, usually five to seven years.
Marilyn J. Holt, CMC
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.