One Question Is The Key To Everything

A tale of 2 companies – A North American management team and a European management team walk into an M&A Firm…

It sounds like the start of the kind of bad joke that the keynote speaker tells at an industry conference, but it’s not. It’s the true story of two companies who came to Stillwater for help acquiring new businesses in North America. Thinking about the topic of this post, the stories spring to mind for a reason.

At the start of this series on the steps to buying a business, we must start with one central, fundamental question that will affect every stage of the acquisition process. Answering this question well is the key to your success.

The two companies who came to us for help each gave us a very different answer to this crucial question, and it had a profound effect on the outcome of their stories—more about them in a moment.

Once you decide to begin the process of buying a business and you sit down with us for a first conversation, we always start with this fundamental question (I think it’s the only place to start):


That is to say: Where are you going, and how will you get there? And why are you going there?

What is your mission?

I know—this is basic, first-day-of-class stuff, but you’d be surprised how many established companies come to us without a clear answer.

I think every business owner should be ready to give a perfect elevator pitch of the company’s strategy and mission at a moment’s notice. Those words are a silent but powerful driver of your company. Your business strategy should be hovering in sight at all times, ready to be applied at every key decision point. A solid, well-developed strategy and clear mission keep a company on the right track and moving forward.

I call this The Compelling Why.

Why does your business exist?

If you want to find real success, the answer to that question has to be more than “to make money,” which tells the world nothing about you and tells you nothing useful about where to steer your company next.

So, how does this compelling question of Why relate to buying a business?

Well, there are real costs to buying a business—financial costs are obvious, but there are others: your internal capacity and operating bandwidth will, without question, be strained at times during the acquisition process; there are potential impacts to your existing customer base as you make changes to make room for the new business; even your business model will require some evolution to prepare for the onboarding.

In short, buying a business costs you more than just money. Do it right, and it can be worth it, but the process itself will make demands on all your resources.

So, you must buy the right company, and it is hard to do that if you don’t know your own company.

I can’t overemphasize this – you need to have an answer to the question: What is my business strategy?

With that answer in place for your own company, you set yourself up to ask the right questions about the companies you are looking at purchasing. Namely:

  • How does this business further the mission of my own company?
  • How does this company mesh with the overall strategy of my business?
  • How will this acquisition move my company forward in realizing its goals?

It also empowers you to ask the opposite and equally important questions:

  • Are there elements of this business that will divert focus from our overall mission?
  • Are there factors in this business that will actually hinder or halt the realization of our strategy?

That is why we begin every acquisition process at Stillwater with a deep dive into the fundamental question of your business strategy. We can’t proceed with a company that can’t give us a clear answer. Without a clear mission to steer by, you set yourself up to make bad choices throughout the process. With one in place, you are set to narrow in on the smart decisions right from the start.

So, two companies walked into Stillwater to start an acquisition process…

When we asked the North American the fundamental question about their business strategy and how it related to their acquisition criteria, their answer was simple enough: “to grow revenue.” The company’s strategy and mission was… to make money. That was it.

We researched the markets they were looking at and came back to them with a fairly grim picture: the sorts of companies they were looking at would not deliver the results they were looking for. The fact is this company’s conception of its business strategy was vague and lacked specificity from the start. As a result, they really weren’t ready to begin the buying process—not if they wanted to avoid making bad choices that led to a bad end. It was back to the beginning for them.

The second company that came to mind, a successful European outfit looking for a successful North American expansion, was entirely different. They came to us prepared. They knew the mission of their business, could clearly state their driving strategy, and had already thought about how the companies they were considering would impact these going forward.

This made all the difference. With a clear vision of where they were headed, we knew where to begin and what to look for.

And, when we came back to them with the news that the sort of company they needed didn’t really exist, it didn’t end there. With their clear strategy as a guide, we were able to come back to them with a plan that worked.

While no single company meshed perfectly with the direction of their business strategy, we showed them a portfolio of companies, each with individual components that would work together to fulfill their strategy as a unified whole.

That company had set itself up for success from the start because they knew who they were and where they were going. They knew the answer to the one question that’s the key to everything:


Before you put strategic acquisitions on the operating plan, ensure you know the answer to that question for your company. If you’ve already got a business strategy in place, give it a refresher so it’s glowing brightly in your thoughts.

And when you have the first conversation with your potential M&A Advisors, make sure they ask you the question: what’s your business strategy? It’s the only starting point to doing this process right.

A word of comfort – it’s okay if you don’t have the strategy fully fleshed out; if you have the right advisors, they will do whatever it takes to help you and your team complete that critical first step.

I can guarantee that that’s where we start the conversation at Stillwater. We’ll build an acquisition process centered on your strategy to move your business forward. But we’ve all got to know it first.

Get in touch with us here.

Written by: Douglas Nix