The growth and progression use to be or should be the main goal of every company. A priori the next maxim should be fulfilled: the bigger, the better resources, the better possibilities of entering in new markets, even out of Spain, the higher efficiency and competitiveness. In order to generate more size, they are essential big investments, with a well designed business plan, a complete dedication and a great capacity of management, apart from other issues noto always manageable.
To build from a small company a big corporation is something that every (or almost every) businessman want, but that firstly it is presented as an extremely big challenge, full of obstacles and difficulties, without taking into account the proper challenges of every day. Luckily, they exist a lot of opportunities and methods to achieve the goal of creating a company, and one of them are the Build Up; which we could define as to build a big company from the acquisition of small and medium companies, being the resulting of the integral addition of all of them bigger than the addition separately.
In order to perform these deals, that over the paper can seem simples, one of the best possible partner are the venture capital firms, both for counting with its essential financing contribution or for counting with its collaboration or know how in some integration and management processes that are actually very complicated. In fact, Build Ups have been and are one of the favorite kinds of deals for the venture capital firms. The fact is that venture capital firms are the main partners of these deals are explained basically because of the difficulties, specially linked these crisis times, to find the needed financing and because of the great management challenge that implies.
In a lot of sector of our economy Build Ups seem the perfect solution of growing, due to the fragmentation and dispersal of a lot of markets; in addition in lots of cases there are companies of local and regional character until becoming the resulting company in national leader of the field. The aim is that the result of the addition of small and medium companies could multiply in quantitative terms, thanks to the addition of market shares, the efficiency increase, the brand and the resulting leading.
Despite the advantages that aparently implies a Build Up operation, they are less usual than they were supposed to be, this is because they are complicated deals, where the main goals are negotiation with the potential purchasing objectives and the subsequent integration. As many societal deal, every Build Up is different from each other, but they exist some common points, being the success keys: to identify a good chance, to know how to provide added value, to know purchasing and to know how to integrate.
It exists a key issue in every Build Up process that must be carried out; the establishment of an integration plan between the purchasing company and the dealer one, including the market situation study and the subsequent business opportunities derivative from the operation.
To integrate different companies, with different dynamics, different methods, different cultures, different templates or even different informatics systems, is undoubtedly a challenge life and death in every Build Up process. This stage depends on the final success of the started adventure. Because of this, the management is one of the essential points at a Build Up, being critical the role that the executive team plays, because this is the guarantee that the integration is going to be made with strong criteria and with a definite direction.
A Build Up is a deal for growing, for multiply the addition of different factors, very complex, but with great chances of success, that contributes to build strong efficient companies; always when you can count on the help of experienced advisors. These advisors must be eloquent in the hard and difficult task of finding the best candidates for its acquisition, and especially in the convoluted negotiation tasks.