Although the term creating value is overused, we know what buyers want when they explore buying a business.  They are usually looking for a specific set of criteria.  If your business has them, then the buyer will consider buying it, along with other prospective businesses.  If it doesn’t have those criteria, it is quickly tossed in the waste basket, never to be thought of again.  How does a business acquisition create value?  this usually happens one of two ways.  Either the merger and acquisition helps the company make more sales and therefore money or it has substantial cost savings.  Without one of these two criteria, a business buyer should probably look elsewhere.

Creating value can also happen organically.  through organic growth, a business can not spend the money on an acquisition and save some costs.  A merger is necessary if growth is difficult to come by.  This is why you see many businesses on Wall St. buying other companies.  they have reached the limits of where their markets or products can take them.  They need an acquisition to reach new blue oceans.  A successful M&A campaign can get them back on track.  Mergers and acquisitions are also good at the small business area.  They can turn a small business into one that creates value for their owners in a meaningful way.  Creating value through mergers and acquisitions can be a way to jump start your business.

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