Organic versus acquisitions


Who this is for

Founder led lower middle market companies with 5 to 50 million in annual revenue.

The quick answer

Choose organic when your core offer still has room to grow through pricing, cross sell, and channels you can run now. Use acquisitions when you need a capability, geography, or contract vehicle that is hard to build fast. Compare options on time to impact, certainty of results, and risk to culture and cash.

The framework in six steps

  1. Write the growth job to be done
    Name the customer, offer, and gap you must close.

  2. Score organic plays
    Price, packaging, channel, product extensions. Score time, certainty, and cash needs.

  3. Draft an acquisition thesis
    Targets that bring customers, skills, or contracts you lack.

  4. Compare side by side
    Build a twelve to twenty four month model for both paths.

  5. Decide and stage
    Often the right move is organic first, then a focused acquisition.

  6. Protect culture and cash
    Limit bet size. Plan integration before any letter of intent.

Example

A services firm lifted price by four percent, added a plan offer, and opened one partner channel. Six months later they bought a small specialist to win regulated work. Revenue grew twenty two percent with stable margin.

Pitfalls and fixes

  • Buying to fix weak operations. Improve the core first.

  • Overpaying for growth. Tie price to quality of earnings.

  • No integration plan. Write day one through one hundred days before signing.

Checklist

  • Organic options scored

  • Clear M and A thesis written

  • Side by side model built

  • Integration outline drafted

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