Buying a company can be an exciting way to grow.
Small firms, even those at $1 million in revenue, are pursuing acquisitions. At the same time, many private equity-backed firms are buying aggressively and building roll-ups in our industry.
But here is the point: having more capital, advisors, and deal experience does not guarantee success.
Some private equity firms are struggling. If sophisticated buyers with deep resources can run into trouble, then smaller firms should not underestimate how hard acquisitions are.
Here are 3 mistakes to avoid as you pursue your own acquisitions.
1. Losing focus on employees and clients
This is the original sin.
When a new buyer gets involved, financial oversight becomes an added priority.
The danger is when the buyer adds too many new priorities like reporting requirements, expense reduction, new KPI’s, and policy changes.
Whether the buyer is private equity or a local company making its first acquisition, the lesson is the same: if you lose key employees or weaken client relationships, the deal starts losing value quickly.
Example: Coaching a $2 million firm on a merger with a $1 million company reveals how complex even small deals can be—owner roles, systems, culture, and decisions on what to keep.
But no matter your size, don’t let complexity overshadow the basics. Never take your eye off the employee and client ball.
2. Underestimating integration
Integration is where acquisitions get harder than expected.
It’s important to get everyone onto the same software—but that’s just the beginning.
- Processes
- Reporting
- Payroll
- Communication
- Service standards
- Leadership expectations
And the hardest part: integrating cultures.
Example: A peer group member who acquired a company twice his size found financing easy—but culture and leadership integration far more difficult.
3. Assuming the acquisition will create enough growth on its own
Acquisitions are expensive. For them to create real value, the acquired business must continue to grow organically.
Organic growth includes:
- Upselling
- Cross-selling
- Referrals
- New client acquisition
This growth is critical.
At a recent Summer Growth Summit, leaders from Schill Grounds Management shared that while acquisitions help solve staffing challenges, they aim for a balance—50% of growth coming organically.
This balance is key to long-term success.
Your Challenge: Being prepared is the main thing
Acquisitions are powerful—but unless you are simply buying a list of clients, they will be one of the hardest things you do in business.
Prepare now:
- Build a leadership team that can scale without losing culture
- Refine systems and software before integrating other companies
- Ensure marketing and sales can support a larger footprint
Final note: Being prepared for acquisition success will make you successful even if you grow organically.
Regards,
Jeffrey Scott
If you want to learn more about how to prepare for growth, join us at our Summer Growth Summit, Aug 18–20.
We have invited past hosts like Jerry Schill and Frank Mariani, along with current hosts and community members sharing real growth experiences.
Register now—super early bird ends May 8.
