When to Merge Your Small Business With a Larger One

Many of us entrepreneurs start our journey with the dream of leading our own business to great success. In media and pop culture references, such journeys are often depicted in the form of a lone entrepreneur blazing a new path.
When we get to the practical side of starting and running a business, it’s common to have to rethink our strategies.
Sometimes that includes changing one’s dream of being a solopreneur or never selling your business.
If you’re in a place where you’re not sure if you should partner with someone, sell your business, or merge your company with a bigger brand, then this post is for you.
Let’s look at some reasons why you should consider changing your current business model and joining a larger brand.
Keep customers satisfied
When you’re a solopreneur or a small business owner, you necessarily have to undertake multiple roles.
You have to market your business, do customer support, build your product, and manage several other issues.
Running your business in this way is feasible up to a certain point.
But what happens when customers start asking for new features? When you’re already occupied with maintaining the status quo in your company, you won’t have the hours, the resources, or the energy to innovate your products.
So, take a look at your feature request tickets and customer feedback forms. Have they asked for customizations and help? And are you able to meet these needs soon enough?
If your answer to the first question is yes and no to the second, then you need to consider bringing in more people or partnering with a larger brand.
Unless you innovate and meet your customers’ growing needs, you’ll lose them to another business.
Increase your range of products and services
If you have a single product or service, then being part of a bigger brand can automatically increase the product range you offer to your existing customers. Of course, this depends on the kind of agreement you reach.
But increasing the type and number of products you offer becomes easier when you work with a larger team and have access to more resources.
It’s helpful to reach out to a company where you know they have products that complement your work. If your business and product make sense within the portfolio of the bigger company, then it becomes easier and more appealing to merge into a new way of doing business.
In my business, we buy out or merge with other companies that have already created a product instead of building one from scratch.

The main reason we do this is because we don’t have to be experts at everything. By merging other products and brands within my own, all the business partners can focus on what they are good at.
Mitigate the effect of seasonality
Many businesses experience seasonality in their sales. That is, during some parts of the year, they see an increase in sales while in other months, sales go down.
When you are part of a larger business with more products, you create a source of income regardless of seasonality.
If one of your products is experiencing low sales due to seasonality, you’ll still have revenue coming in from other products.
Having a constant source of income is essential to help your business grow and will help you build reserves against challenging times.
Focus on growing your business
Many business owners start out by putting all their focus on building a great product. After all, if you create a great product then the customers will come to you, right?
However, every entrepreneur comes to a place in their career where they need to step back from the actual product development process. And they need to focus on marketing and the top-level governance of their company.
When you merge with a larger company, you can focus on the product building and have your partner/employer-founder manage the rest. Or you can get more resources to hire other people who can do the technical work while you guide the overall product and business development.
Personal concerns
While I have placed this point last, it’s definitely not the least important factor when you’re deciding to sell your business or get acquired.
The idea that being your own boss means that you can get more free time and live on your terms is not always true.
In fact, when you’re a solopreneur or a business owner whose entire livelihood depends on your business, you may have less freedom than if you had a typical 9-5 job.
It’s very common for business owners to be stressed, to work on the weekends and late nights, and to have few to no holidays. In some types of businesses, if you take some time off that you could in an office job, you simply won’t make money.
So, if you find that you’re always stressed out and aren’t able to spend enough time with your family, then you have valid reasons to partner with a larger business.
Caring for your mental health and having the time and energy to socialize are important reasons for you to change how you work. By merging with a larger business, you get more help and find more time to have a social life and stay happy.
Growing your business and making the right decisions for your products can be frightening at times.
If you’re feeling stuck or burned out in your work or find that you’re not able to meet your customers’ needs, then you should consider making a change.
This change can be to hire more people and step back from the day-to-day activities. It can also be to sell your business or enter an agreement where you merge with a bigger brand.
I’ve outlined some important reasons for merging your company with another business. As you go through the post, think about whether any scenarios apply to you.
Change is scary but it can be the thing that brings you peace of mind and boosts your business growth in the long run.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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