Business Acquisitions

Business Acquisitions
Student’s Name
Institution
Introduction
Entrepreneurs start businesses aiming for growth (Bovée, Paul, Thill& Mescon, 2007). As such, they seek to find the right avenues for the growth their establishment. This is a skill that embraces a critiquing of open opportunities alongside continuous development. During growth, the determinant factors relate to both the enterprise and the proprietor. The following is an in-depth analysis of a business at a crucial stage. The owner seeks to determine the best possible option for growing the business and selling out.
Growing the Business
An entrepreneur’s vision carries on throughout the growth processes from conception to maturity (Scarborough, 2011). As such, any strategic choice needs to be in its regard for sustainability. First and foremost, the proprietor needs to evaluate the available resources necessary for the growth process. This is essential in order to size up the probabilities of conflicts of interest and divergent approaches. The following are two major steps in carrying out the growth process. One involves its market while the other focuses on the financial aspect.
Since the business exists to serve its clients, expanding on this front, therefore, seems the most likely starting point. This is a process that will involve the creation of a wider market beyond the existing one. Getting a foothold in new markets is an essential step for organizational growth. Meeting the new demands has in itself the potential to spur new and phenomenal growth.

New markets exist in places unreached by the competition or amongst customers unsatisfied by big businesses. These vacuums can, however, close very quickly. Tapping these new markets, thus, calls for swiftness.
In addition, the business should evaluate its potential for new products. This is a method growth aiming at new markets and eventually increased revenue. New products have the effect of adding value for the customers. Value creation is a powerful tool for customer satisfaction. Essentially, the business sustains its market due to the value of its products. In this regard, better products have an added bonus of spurring market growth. New products or services are always the sources of life for a business. For it to grow and improve, it must embrace them.
To sustain the quest for an expanded market and new product creation, there must be enough finances. Therefore, building the financial resources is strategically crucial to business growth. Finances are essential as development capital (Gitman& Zutter, 2012) and necessary for survival through rough times. The proprietor may finance it in two major ways: debt or equity financing. In this, it is the business owner prerogative to determine how much liability to carry versus the level of control.
Most lenders require a form of security beforehand. In addition to this, they may require a proven financial track record as a bare minimum. Though the owner maintains control, the downside of debt financing is that the liability assumed may result in asset losses in case of defaulting on repayment. On the other hand, the proprietor may give an investor a stake in the company in exchange for finances. This is referred as equity financing. Besides outside cash injection, the business could choose to bootstrap. This kind of self-funds cancels out external liabilities and loss of control. Again, a connection with strategic partners would enable it to align resources that will eventually feed the business either at a later date or through provision of access to the essentials of a certain line of products.
Selling Out
At some point in the life cycle of a business, the proprietor is at a critical junction on how to sell out the business. This involves considerations affecting both the business and the potential buyer. First of all, there exists a risk in relation to human resources. The deal between the proprietor and the buyer may offer guarantees to the employee’s job security. The new management would, therefore, be required to mark out new strategies towards a smooth transition both for the business and the staff. However, the buyer should be in a position to apply their best strategic plans.
The sellout could be made to an individual or an institution. These two types, however, need to be scrutinized in order to ensure legality and transparency. First of all, the proprietor should carry out due diligence on individual buyers in order to rule out the possibilities of money laundering. This is a criminal affair that may result in undesired litigations. Though there may be a monetary appeal to the deal, the laws of the land would deem the owner criminally culpable if found to facilitate laundering.
In addition, the business owner should evaluate the financial statements of institutional buyers the viability of the firm’s projections and thus determine its continuity. Though there is always the risk of complete restructuring, the entrepreneur should ensure the institution is in a position of effectively altering the business whilst considering factors such as the human capital. Finally, there should be a consideration of any national or international regulations prohibitive to any form of selling out. This will enable the proprietor in sifting through the different business tariffs regarding regional buyouts.
References
Bovée, C., Paul. C.A., Thill, J., Mescon, M. (2007). Excellence in Business (3rd ed., pp. 180-184). Upper Saddle River, NJ: Prentice Hall.
Gitman, L.J., & Zutter, C.J. (2012). Principles of Managerial Finance (13th ed., pp. 716-736). Upper Saddle River, NJ: Prentice Hall. 
Scarborough, N.M. (2011). Essentials of Entrepreneurship and Small Business Management (6th ed., pp. 190-206). Upper Saddle River, NJ: Prentice Hall.