M&A Advisor Tip: Expand the moat, reshape the hourglass

Acquisitions work best when they accomplish one of two goals: expand the moat or reshape the hourglass.

Expanding the moat means leveraging your core advantage. The more you can strengthen that advantage, the wider the moat around your company, protecting it from competitive forces.

As for the hourglass, its narrowest point is your company’s primary weakness or limiting factor. If you can find a company that does that thing well, and acquire and integrate it into your business, you reshape the glass so business flows through with ease.

For advice on exit planning or selling a business, contact Al Statz, CEO of Exit Strategies Group, Inc., at alstatz@exitstrategiesgroup.com. Exit Strategies Group is a partner in the Cornerstone International Alliance.