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When should a business look for inorganic growth?

Making a decision for business growth is an important step so have proper knowledge of what inorganic growth is and why is it better than organic growth.
BY Akshay Arora
Feature Writer, BusinessEx
Nov 29,2017

A person starts a business with a perspective to grow and seeks for the opportunities that help the business grow. If you have started a small business and running for some time then you must think that how can you enhance the business operations in order to generate more revenue. Well, there are two approaches to grow business either you go for organic growth or you can go for inorganic growth. Lets first understand the difference between both the approaches.

Organic Growth Vs Inorganic Growth

Organic growth is nothing but a process to grow a business by increasing output, customer base expansion and other activities which include the development of existing business only. On the other hand, inorganic growth is enhancing business productivity through mergers and acquisitions. For Example, if an entrepreneur is looking for an opportunity to grow due to low revenue this then there are two solutions either to bootstrap your business (organic growth), to focus more on business activities or buy a business (inorganic growth) of the competitor or whichever you think will add more to your business.

What is the problem?

There are two problems that arise, the first is when the right time to look for inorganic growth is? The second is where to find right business opportunity? Well, the solution to the second problem is simple as now there are platforms where you can buy or sell business easily like BusinessEx. Now the problem left is to decide the right time to opt for inorganic growth. Lets see the solution for that.

When should a business start plan for inorganic growth?

Need:

There are situations when an entrepreneur has to decide which road will help the business to reach the next phase. Everyone wants more from their business and when a business in a complex situation then it is essential to make tough decisions. Inorganic growth can help a business to solve these problems in the best possible way. As inorganic growth is basically mergers and acquisitions which business can explore when there is need to grow their business without bootstrapping. Especially when there is a financial crisis or lack of resources in the business then it is preferable to apply this approach. This approach is common for big businesses but it is essential that small businesses understand the need for it.

Business Model:

Business decisions need to be made on the basis of the business model and every business has its own model and approach to follow. It is a procedure with new trends and techniques new strategies need to be adopted for the business to nurture in future. By adopting the method of inorganic growth, one can always look for greater possibilities for the business as it adds more to the business in terms of money, team members, scalability, performance, etc. When you felt that you have the chance either to bootstrap the existing business or finding a new business opportunity that will add up to your business then thats the time to make your decision as per your understanding.

Growth Rate:

Growth rate helps an entrepreneur to make a decision for its business as what will be the best option to take it to next level. Growth rate fluctuation depicts the performance of the business which each and every entrepreneur wants to see it as increasing but it isnt possible every single time so when the situation is reverse the rate is going down then an entrepreneur needs to make the decision of opting inorganic method or not. It is a great opportunity that not much of the entrepreneurs are willing to take even their growth rate says the other way around.

Conclusion

An entrepreneur faces many situations in its lifetime and needs to make hard decisions to survive in the present ecosystem. As per the information stated above the way to inorganic growth is best suited for a business to opt-inas its difficult as well as good times if there is a good opportunity. To find a good business opportunity then there are platforms that help to solve this problem and business exchange is one of the best platforms that provides an opportunity to explore established businesses for buying and selling purpose.

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