We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Business

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What Are Small Business Acquisitions?

Malcolm Tatum
By
Updated: May 17, 2024
Views: 3,492
Share

Small business acquisitions are business deals in which small businesses either merge with another company or are purchased outright by a group of investors or another corporation. Acquisitions of this type may take place for a number of reasons, including eliminating competition in the marketplace or as a strategy to gain control of intellectual property or assets owned by the acquired business. Depending on the purpose of the acquisition, the small business may continue to function in much the same manner as before, or cease to operate as a distinct entity within the business community.

One of the more common examples of small business acquisitions is the merger. Small business mergers often occur when the owners of two smaller companies come to realize that by combining their resources, the potential to capture a greater market share is enhanced significantly. When successful, the merger of two or more smaller companies helps to create an organization that can reach more customers, produce greater quantities of goods and services, and in general function with a degree of efficiency that would be difficult for those businesses to achieve on their own.

Large companies may sometimes engage in small business acquisitions as a means of neutralizing a threat to that company’s position within the marketplace. In this scenario, the smaller business may show promise of becoming a major player within the industry and eventually threatening the prestige and the revenue stream of the larger company. In order to prevent this from happening, the larger business will take steps to acquire the smaller company, including any intellectual property and product development efforts that are underway. This allows the new owner to absorb those assets, effectively eliminate the threat, and possibly even use those assets to strengthen the new owner’s market share.

Small business acquisitions may also come about as part of the strategy of a corporate raider. In this scenario, the idea is to gain control of smaller businesses that have one or more assets that the raider believes can be sold at a profit. Once the business is acquired, it is often dismantled and various assets such as land, equipment, and other holdings sold to the highest bidders. The raider may even be able to sell the shell of the acquired company for a tidy sum, making the venture all the more profitable. Once complete, the raider will look for other small business acquisitions to pursue, repeating the process of buy, dismantle, and sell as the means of generating profits.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Editors' Picks

Discussion Comments
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
Share
https://www.wisegeek.net/what-are-small-business-acquisitions.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.