Tell me if you’ve had this experience: You’re on a shopping trip and find a shirt you absolutely love. It’s the perfect color. It’s stylish. Everything about it speaks to you. It just doesn’t fit quite right.
You bought the shirt because you’d spent so much time looking for one just like it, and because you weren’t sure you would ever find one in exactly the right size. But then you regretted it. Because for all its positive qualities, the shirt still didn’t fit. And because it didn’t fit, that shirt sat in your closet, unworn and ultimately forgotten.
The same thing can happen with a business acquisition. When growing a business, acquisition is a common strategy, but the stakes related to making a bad purchase decision are high. A thorough due diligence process can help companies avoid a bad fit.
We had a situation like this recently at Meyers. We looked at acquiring a business that would have brought us a new capability. We kicked the tires, ran the numbers, and ultimately decided it wasn’t a good fit. Getting to the point where we could say No was difficult. The target business was maybe a 50 percent fit, and we were tempted after the background work to ask ourselves if we could make the missing 50 percent work.
What we did instead was take a closer look at our existing business. We analyzed the advantages of adding the capabilities the acquisition would have brought us, and about how we could capitalize on those advantages. In that way, the work we put into due diligence wasn’t wasted. Instead, it turned into an opportunity to take a closer look at the work we do and how we might improve.
That kind of self-reflection is essential. It’s an opportunity to consider your operation and ask whether there’s a better way. It’s part of a process of continuous improvement, and it’s necessary if you want to keep your business from stagnating or falling behind the competition.
So, explore those acquisition opportunities. They might lead to a purchase, or they might lead to some new insight. Either way, you win.