So, you’re looking to grow your staffing agency through acquisition. Now what? There are two next steps that need to happen simultaneously to keep the process on track: identify a firm to acquire and look for potential investors to make the acquisition happen. Last month, I shared three tips for successful staffing firm acquisitions to help you find the right firm to acquire, and now I’m talking step two: securing funding. Pitching to investors can mean a daunting road for those who haven’t traveled it before. But, based on my experience, acquiring two companies in three years, it can also be one of the most exhilarating things you can do as an entrepreneur.
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Here are five lessons I learned along the way to help you find success when pitching your company to investors:
- Poke holes in everything you do from a business model standpoint and make sure all scenarios accurately reflect upside and downside (what would happen if a big client were to leave, for example). Investors will ask more questions than you can possibly prepare for so do everything you can to be ready for as many as possible.
- Develop your story to show how the combined entity is stronger than each company continuing to operate independently. Two key areas to focus on are the management team of the new organization, and how the company will diversify and expand its client base and revenue.
- Make sure all your numbers support your story. Investors are in the business of making money from their investments so be prepared to show them how they will.
- Assemble a seasoned team—consultants, advisors, legal and accounting professionals—to ensure you’re getting the best possible terms for the transaction. This group can help identify items you might not otherwise consider and advise you about the best negotiation strategies.
- Be patient. The process inevitably takes longer than you expect; I made 50 pitches to end up with two prospective investment firms.
In today’s hyper-competitive, ever-changing business environment, making an acquisition is a smarter strategy than ever. The right investment firm can help you make the deal happen and move your company into its next era of growth and prosperity. Good luck!
