Strategic Acquisitions

4. Diversifying to Cut Risks

An acquisition could help you limit or offset the risks in your existing business.

4.1 You may want to diversify your product line.

• You may rely too heavily on one product.
• Some of your products may be coming to the end of their product life cycles.

4.2 You might also want to consider market diversification.

• An acquisition could help you open up export sales, or reduce your dependence on just a few customers.

4.3 Acquisition could help even out workloads, if you have a seasonal peak in activities.

• For example, if you cater for the Christmas trade, buying a company which makes goods for the summer could add balance to your activities and improve your cashflow.