Why M&A Must Be in Your Growth Playbook
In the past few months, I’ve had 10x Is Easier Than 2x by Dan Sullivan recommended to me three times. While I haven’t fully dived in yet, the core premise resonates: achieving exponential growth requires a shift in strategy. You can’t just work harder or add more of the same—you have to think differently.
For business owners asking, how to 10X my business, the answer isn’t just organic growth. Many entrepreneurs focus on winning more customers, hiring more employees, and expanding gradually. But at a certain point, this approach isn’t enough. If you want to scale from “millions” to “tens of millions,” acquiring a business should be part of your strategy. Growing through M&A allows you to scale faster while mitigating risks associated with traditional expansion.
The Challenge of Scaling Up: Why 10X Growth Feels So Hard
Consider a common scenario: A client running a $5M revenue company told me they wanted to scale to $50M. Their plan?
Grow to $10M revenue in the next 12 months.
Continue expanding to $50M within 5–7 years.
The problem? They were relying entirely on organic growth—hiring more employees, investing $500K–$700K in new headcount, and hoping additional capacity would push growth. While there’s nothing wrong with organic growth, scaling this way has major limitations.
Why Organic Growth Alone Isn’t Enough
Many businesses can organically grow from $500K to $5M by unlocking operational efficiencies. But going from $5M to $50M? That’s a different game entirely.
Challenges of Scaling Through Organic Growth:
Infrastructure Constraints: Your current team, equipment, and technology were built for a smaller scale. Growth requires significant upfront investment.
Capital Intensity: Scaling means adding employees, equipment, and office space before revenue catches up.
Market Saturation: Expanding in the same way as before may not work if market demand is limited.
Longer Timeframes: Organic growth can take years, making it difficult to 10X your business in a reasonable timeframe.
Instead of struggling with these constraints, successful businesses incorporate M&A into their playbook to achieve rapid expansion.
How to Grow Through Acquisition
Imagine this:
Instead of hiring a new sales team, what if you acquired a business that already has an established customer base and sales infrastructure?
Instead of spending on new equipment, what if you bought a competitor that already owns the assets you need?
Growing through acquisition eliminates the guesswork and provides immediate access to revenue, talent, and resources.
Example: Acquiring a Business for Rapid Expansion
Let’s say you run a $5M company and acquire a $3M revenue business. This target company:
Generates $800K in net profit annually.
Can be acquired for $2M (structured as $400K cash upfront, with the rest financed through loans or seller financing).
After debt payments, still produces around $500K in cash flow per year.
This means your initial $400K investment is fully recovered in about a year. And from that point on, your return on equity is 100% annually!
Even better, if you can cross-sell to each other’s customers and streamline operations, your return improves further.
By leveraging M&A, you can hit revenue goals faster with less risk than trying to build everything from scratch. For example, a $5M company trying to reach $10M organically must grow 100%—a daunting task. However, if they acquire a $3M business, their combined revenue jumps to $8M, requiring only 25% organic growth to hit their goal—a much more achievable target.
Avoiding Common M&A Pitfalls
While growing through M&A is a powerful strategy, poorly executed acquisitions can destroy value. Here’s how to avoid the biggest mistakes:
Buying for the Wrong Reasons - M&A isn’t just about getting bigger—it should create strategic advantages.
Good Reasons to Acquire | Bad Reasons to Acquire |
Expanding into new geographic markets | "Because our competitor is doing it" |
Acquiring complementary products or services | "Because we just want to be bigger" |
Unlocking cross-selling opportunities | "Because we think it’ll magically fix our problems" |
2. Poor Due Diligence- Even if a company looks great on paper, hidden risks can destroy value.
Conduct thorough due diligence in key areas:
Financials: Are the numbers accurate? Have audits verified them?
Customer Base: Do their customers align with your business?
Legal & Compliance Risks: Are there any hidden liabilities?
3. Weak Integration Planning - A deal doesn’t end at closing—value is created (or lost) in post-merger integration.
Who stays, who goes, and who gets promoted?
How do you communicate with existing customers?
What’s the plan for branding and operational changes?
A well-structured 100-day integration plan should be developed before closing, not after.
How a Fractional CFO Can Support Your M&A Playbook
Many mid-market companies don’t have dedicated M&A teams—which is where a Fractional CFO can add massive value. Fractional CFOs help businesses navigate acquisitions with expertise in:
Fractional CFO Services for M&A:
Capital structure planning
Financial modeling for acquisitions
Cash flow and profitability optimization
Fractional Corporate Development Services:
Identifying acquisition targets
Deal structuring & negotiations
Post-merger integration planning
By working with a Fractional CFO, companies can access high-level expertise without hiring full-time executives, allowing them to scale through acquisition more effectively.
Final Thoughts: How to Scale My Business with M&A
If you want to 10X your business, you can’t just “do more of the same.” M&A must be in your growth playbook—when executed well, it’s the fastest and most strategic way to scale. By combining an M&A strategy with Fractional CFO services and strong post-acquisiti
on management, you can grow through M&A while minimizing risks.
It’s time to think bigger. It’s time to move smarter. Let’s make 10X happen.
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