'Merger Monday' And What It Means For Small Businesses

‘Merger Monday’ And What It Means For Small Businesses

Businesses are growing to the point where the entire market is taken up by large companies, leaving smaller businesses with very little room to compete. In fact, companies essentially taking over small businesses has become such a common occurrence that it’s now widely known in the investment sector as ‘ merger Monday .’ Every so often at the beginning of the week, another company joins an existing international giant. What does this mean for small businesses? The short answer to that question is that times are a lot more difficult for these companies. But, we can perhaps go a little deeper than that.

Always Preparing For The Future Sale

That’s right when you start a new SME , you always need to be thinking about that future sale. Now, you might argue that companies should always consider a future sale, no matter how successful or unsuccessful their company business. Eventually, all companies are sold to new owners. The problem is that lately companies have been sold almost immediately after they have opened on the market. An example of a company like this is Diapers.com. If you follow that link, you won’t find a company anymore, it will take you directly to Amazon. That’s because this business attempted to sell Diapers to customers online and was quickly bought up by Amazon for an obscene amount of money. The good news is that by preparing for a sale, businesses can essentially make sure that they do make a profit, even if they are bought out. The bad news is that it does bring the longevity of even the most successful start ups into question.

Desperate Times…

Small business owners could certainly start to feel a little desperate and vulnerable on the market. They might find that larger businesses are taking a lot of their sales. In cases like this, it’s important for a business to keep it’s head above water, perhaps borrowing the money that they are no longer making outright. With merchant cash advance financing , companies can fund their business even when they’re not stable in terms of profits. And while this does make things quite risky, it will mean that they are able to stay afloat, even when in the water with a particularly nasty competitor.

An Opportunity?

Of course, if a small business can avoid a merger and still survive against a large conglomerate, there might just be an opportunity to gain a massive slice of the market. The reason for this is that a number of business industries are now based around an oligopoly where there is limited competition, keeping prices at a constant and even allowing businesses to universally rip off customers. If a small business could break through, they might have the power to steal a lot of the demand here and gain a competitive advantage, simply by offering a better deal. There have been numerous attempts to do this with the air travel industry being a positive example.

Companies like Ryanair have attempted to position themselves as the budget option for flights in the UK. Though, this hasn’t been completely successful .

So what does the massive surge of mergers means for small business? An already intense race to profitability has become even more fierce. Business owners will need to make sure their company stands out to survive .