// EDITOR’ S QUESTION //

Acquisition tends to make sense when time is a limiting factor. If you’ re trying to break into a new sector or geography, or quickly gain skills and capabilities your business lacks, buying an established company can be more efficient than building those things from scratch.

The same applies to acquiring customer bases or intellectual property, both of which can take years to build naturally. But these benefits only materialise when the acquisition is planned, properly financed and followed by a wellmanaged integration process. Rushed deals are rarely successful.

Building organically can be the better route if your business has the time, cash flow and internal talent to scale sustainably. It gives more control over culture, brand identity and operational structure. For small businesses in particular, building is typically more financially manageable, avoiding the need for external debt or investor dilution. However, it may also mean slower progress or missed opportunities if competitors are moving faster through acquisition.

In reality, the decision often comes down to financial readiness. An acquisition typically requires serious upfront capital, strong cash flow forecasts and contingency planning. Many SMEs underestimate the capital needed after an acquisition for things like onboarding staff, upgrading systems or supporting customer transition.

That’ s why access to finance is so important when considering M & A. We always advise businesses to have their house in order before they embark on an acquisition. It’ s important that you ensure financials are up-to-date, identify any funding gaps and explore a full range of finance options, from traditional lenders to alternative providers which understand acquisition funding.

Another important consideration when weighing up buy vs build is market timing. In a volatile economic environment, valuations may be lower, but so too is appetite for risk. If interest rates are high or borrowing is expensive, it may be a sensible time to focus on organic growth. Conversely, if the business is in a strong financial position and a strategic opportunity presents itself, holding back could mean missing out.

As with so many big business decisions, there is an element of risk involved. Ultimately, whether you buy or build, what matters is having a clear plan and managing your finances carefully. Acquisitions can be a fast track to growth, but only if you have the right funding, strong leadership and a clear integration plan. Growth is essential, but it only happens when it’ s stable and manageable.

MANY SMES UNDERESTIMATE THE CAPITAL NEEDED AFTER AN ACQUISITION FOR THINGS LIKE ONBOARDING STAFF, UPGRADING SYSTEMS OR SUPPORTING CUSTOMER TRANSITION.

Intelligent SME. tech

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