Strategies to Drive Growth
There are many ways existing companies can drive growth in their operations.
Mergers & Acquisitions
A company can drive growth by acquiring or merging with a competitor or synergistic business to increase sales while reducing overhead. This enables them to enter a new market, cross sell to existing or acquired customers and obtain expertise that would be costly and time consuming to develop internally. Professional advisors exist to help define an M&A strategy, identify acquisition targets, structure and negotiate the deal, and assist with integration.
Often times organic growth does not produce enough capital for the company to take advantage of growth opportunities. Profitable companies with significant growth opportunities are good candidates for investment capital from various types of investors. Such investors typically take minority equity positions. An important thing to remember is the capital is not always the most valuable thing an investor can bring to the table - they will often leverage their in-house skills, experience, and strategic relationships to help the company grow.
There are various debt instruments available to allow companies to leverage assets to take advantage of growth. The following types of debt instruments are available: Accounts receivables finance/factoring, purchase order finance, contract finance, equipment finance, mezzanine finance, cash flow lending, senior and equity lines of credit, acquisition finance, etc. Many lenders exist that specialize in one or many of these different forms of lending. A broker or investment banking professional can help you figure out what is best for your business.