CHAPTER 12 Driver #6: Transactions and Alliances “Right transaction, right price, right time”

 

There’s an old proverb that goes “Fools build houses, and wise men buy them.” When it comes to deciding whether to build or buy in the context of accelerating entrepreneurial growth, it’s more complex and nuanced (see Figure 12.1). Transactions and alliances are almost always part of any exceptional business growth story; the question is deciding when and where to adopt them – and then with whom.

Circular flow diagram shows key steps of funding growth. The inner circular arrow represents five key steps of funding growth that are Step 1: How much do I need, Step 2: When do I need, Step 3: Determine source, Step 4: Close the deal, Step 5: Prepare for next round. The outer circular arrow also represents 11 key steps of funding growth that are Step 1: Develop Growth Story, Step 2: Build financial model to reflect Growth Story, Step 3: Set milestones to achieve Growth Story, Step 4: Build your Growth Story for external investors, Step 5: Identify appropriate options for your stage or sector, Step 6: Prepare for due diligence, Step 7: Consider multiple sources of funding, Step 8: Execute on the capital raising process, Step 9: Determine the investor mix and allocation. Step 10: Evaluate your options and Step 11: Plan your next funding round now!

Figure 12.1 EY 7 Drivers of Growth – Transactions and alliances

Your company’s growth is likely to follow a combination of the approaches depicted in the simple matrix shown in Figure 12.2. Growth can be achieved by:

  • Selling more existing products and services to existing customers
  • Selling new products and services to existing customers
  • Selling existing products and services to new customers
  • Selling new products and services to new customers.
The figure shows a matrix depicting a combination of growth options. Where growth is achieved by:
(a) Selling more existing products and services to e existing customers.
(b) Selling new products and service to existing customers.
(c) Selling existing products and services to new customers.
(d) Selling new products and services to new customers.

Figure 12.2 Growth options

The exceptional Entrepreneurs we interviewed have accelerated the growth of their businesses by using a well-planned combination of organic growth (growing both their customer and product base using existing and directly hired resources) and inorganic growth (growing products or customers in new markets through acquisitions ...

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