Its interesting to note that SMEs have taken the lead from their ASX listed “cousins” and are looking for opportunities to expand. Just as in real estate, their are always good investment opportunities to be had during the low point of any cycle.
The one challenge I ask of all my SME clients looking to expand, regardless of the timing, is to make sure they know they will create value when they make the acquisition.
And to do that they need to have an understanding of the value of their existing business and how that value will change after the acquisition.
While acquisition is a great way to grow “to the next level”, it is not necessarily a cheap process – and can introduce big risks if not done correctly. But I guess it is the “cheap rewards” that are attracting people right now.