When businesses collide

Several big businesses are currently in talks to merge and acquire others in their market. Even for small business owners, sometimes buying out a neighboring business is an option, while there are some just starting out who prefer to purchase an established business and start fresh.

A study by BusinessesForSale.com that surveyed hundreds of business owners about why they were considering selling their businesses found 38 percent were moving away from or had lost interest in their business, and two-thirds cited credit disparities as hampering their ability to conduct business and their likelihood of a sale. If you need a small business loan either to keep your operations going, or if you're looking for a business startup loan to acquire a new business, an online marketplace like Boefly will get you in touch with available lenders quickly.
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With brand combinations such as Disney and Pixar, Exxon and Mobil and Sirius and XM Radio, consumers are used to seeing related to one another not just because they occupy similar industries, but because their mergers worked. Now Nestle is buying Pfizer's baby food productions and American Airlines is acquiring U.S. Airways. The problem is that all four companies involved in these buyout talks are in financial trouble and investors will suffer if they come to fruition.

"American Airlines has a revenue problem that's much bigger than their cost problem," said Scott Shankland of the Allied Pilots Association.

Small business owners can take a lesson here. Buying into another company's problems can limit freedom in business management, result in increased fees and overhead, and there's no reassurance that an already failing business will suddenly become successful. These mergers should remind owners to make careful assessments before a risky investment puts their company in jeopardy.