Napoleon Bonaparte had multiple military maxims. Two of which were:
Keep your forces concentrated and do not squander them in little packets.
I wish I had read this when we first started. We made our first acquisition in 2011 and our second, a slightly large company, in 2012.
We decided at that point to “always buy bigger”. It took 4 years of meetings until we found our third acquisition. It was twice the size of our second and took us to a new level of operational complexity, revenue, and cash flow.
However, in 2017 and 2018 we did not “keep our forces concentrated”. We bought three small bolt-on acquisitions. One for each of our main verticals. While each acquisition made sense on paper, they did not on their own move the needle.
Any time you acquire a new business you assume risk. You introduce a new variant into the system. That risk can end up being a huge time drain.
Big company, big problem. Small company, big problem.
It would have been better had we harnessed our retained earnings and waited. Compounding our capital in search of the next difference-making company to buy. We would have been better off heeding Napoleon’s word instead of squandering our capital “in little packets.”