Acquisitions Drive Small Business Growth

Entrepreneurs who choose to grow through acquisition are twice as likely to experience sales growth above their industry average as those who grow organically, says a study by the Business Development Bank of Canada (BDC), entitled ‘Business Acquisitions: A Strategy That Drives Growth.’ The mergers and acquisitions (M&A) market among Canadian small- and medium-sized enterprises (SMEs) rebounded quickly when the lockdown measures were lifted, and the outlook for the next five years is very positive, the study notes. "Growth through acquisition has several advantages, including adding new resources to address a labour shortage and accessing more technology, so you can do more with less," says Pierre Cléroux, vice-president, research and chief economist, BDC. In addition, the study shows that the persistent labour shortage will likely lead to more and more entrepreneurs making acquisitions in an effort to bring in new talent. Thirteen per cent of Canadian entrepreneurs plan to grow through acquisition, with new talent and technology as their motivation in order to deal with a labour shortage. The study highlights four winning strategies for a successful business acquisition: include the acquisition in your strategic plan; be dedicated to the acquisition because it will take time; implement the integration plan from day one; and plan for unpleasant surprises.