Making $100 Million in 2-5 years, strategy of consolidation

20 replies
I'm guessing most of us in this forum are small time players.. a few million dollars in turn over at max and nothing near $50or $100 million.. but the private equity, lbo and hedge fund guys make that kind of money all the time..

Anyone trying to do anything in these fields..?

The strategy of consolidation is a food for thought for most of us as it requires capital and a good company foundation before embarking on such a journey, but I think it has direct application in small internet business too.. mainly for people who hopes to make $20..30..or even $100 million in a few short years.

I personally think this is the wisest way to grow a company exponentially.

I hope this post gives you a new mindset on how to grow a business - the strategy of consolidation can be applied to internet business environment as effectively as it can is applied in building large companies in short period of time.

The basic strategy is to identify fragmented industries (with many acquisitions candidates), acquire businesses and achieve critical mass(acquiring companies to own a critical portion of market share) then sell up at a huge premium.

Here's an excerpt which better explains the strategy of consolidation..

The Strategy of Consolidation:
The Secret of Exponential Growth


Growing a company from scratch relies on successful internal growth and usually takes many years of hard work. During that time success is often measured in profit margins of 10%. 15% or even more. Entrepreneurs often find themselves spending more time counting modest revenues and wondering whether they can pay the rent next month. Internal growth requires time that could be better spent focusing on external growth Remember? Kissing frogs? Seeking opportunities?

Building groups of enterprises(websites) through acquisition however equals external growth and as such can be achieved in a relatively short time-frame, maybe two- five years, with staggering financial rewards.

Quantum Leap practitioners search for, identify, evaluate and target fragmented industries. A fragmented industry is one in which several, dozens, even hundreds of companies(websites) compete quite independently within a marketplace, the combined revenues of which have a significant over all value.

Consolidation of a fragmented industry is the process whereby some or all of the individual companies operating within the same market niche are acquired, normally through leveraged buy-outs and put together as a new "group" ofcompanies. The objective is to generate a combined value in this group,
and achieve a synergy by which that bottom-line value is substantially greater than the sum of the individual operations.


And here's the beauty of such a consolidation. The net difference between the new combined value ofthe group and the cost ofacquiring these companies can amount to a multi-million capital gain."

Consider for one moment, the following household names:

• Exxon Mobil
• The Virgin Group
• Unilever
• Time Warner Aol
• Grand Metropolitan
• Thorn EMI
• General Motors
• Proctor and Gamble
• American Airlines
• TWA
• The Disney Corporation
• Bank ofAmerica
• Chevron Texaco
• US Steel
• Daimler-Benz
• IBM

The most significant factor common shared by each of the above companies is that they all began as the dreams of determined individuals, who then built their business up into a legend - largely through buying, selling and consolidating companies (e.g. Richard Branson - Virgin Group).

Get the point? Real wealth is created through the repeated acquisition, sale and/or floatation (IPO) of businesses.
(Taken from the book "Building your own Guthrie - Dan Pena)

If you can resonate with what is being discussed here, I would love to know your thoughts on building an acquisition hungry internet company.
#$100 #consolidation #making #million #strategy #years
  • Profile picture of the author theone30
    Dreaming is Free
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  • Profile picture of the author PPC-Coach
    That's all well and good in theory. But executing any kind of acquisition strategy like that online involves having the cash on hand and hoping that the company you're buying is a real player and not a fake one.
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  • Profile picture of the author brute77
    Any opportunity will require investigation - but the overall strategy of acquiring revenue streams instead of taking a business through the startup stages, generating revenue and finally breaking even..
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  • Profile picture of the author THEDUKEFLEED
    Actually it is my dream

    Thank you
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    • Profile picture of the author brute77
      Originally Posted by THEDUKEFLEED View Post

      Actually it is my dream

      Thank you
      What is, acquiring companies?
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  • Profile picture of the author outwest
    Its kind of like guys asking how can I make 1000 bucks a day in CPA

    the inevitable correct answer is
    learn to make 100 bucks a day, or 50 bucks a day first
    then scale it up

    if you are talking 100 million
    have you any investment capital as of now?
    have you made your first million yet?

    I remember in my 20s I used to have all these pics of Lambourghinis on the wall
    right after I returned from the Amway meeting
    needless to say........................
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    Tech article writing .Native English Speaker(with Proof)
    specializing in SmartPhones , Internet security, high tech gadgets, search engines, tech shows, digital cameras.

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    • Profile picture of the author jeffreys
      Originally Posted by outwest View Post

      Its kind of like guys asking how can I make 1000 bucks a day in CPA

      the inevitable correct answer is
      learn to make 100 bucks a day, or 50 bucks a day first
      then scale it up

      if you are talking 100 million
      have you any investment capital as of now?
      have you made your first million yet?

      I remember in my 20s I used to have all these pics of Lambourghinis on the wall
      right after I returned from the Amway meeting
      needless to say........................
      Outwest,

      Totally agree with what you say here.
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  • Profile picture of the author outwest
    the DUMBEST thing I ever did was stop buying and selling tax sale foreclosure land in 2006. The area I was buying in decided to make new buyers responsible for all the back home owner association dues, which basically killed that market (profitability wise for me at least)

    Now when I go in 5 yrs later and look there is a TON of foreclosure land available in other counties without the restrictions of the area I abandoned

    When I stopped I had about 90k in the bank. That slowly drained.
    Now that I realized the error of my ways I am starting back up with this and should be back to the same place I was when I left within about 6 months.
    Will be nice to have lots of savings again.

    For some reason I am much better at land flipping than I am at IM but I am learning IM and CPA
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    specializing in SmartPhones , Internet security, high tech gadgets, search engines, tech shows, digital cameras.

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    • Profile picture of the author Wide
      Originally Posted by outwest View Post

      the DUMBEST thing I ever did was stop buying and selling tax sale foreclosure land in 2006. The area I was buying in decided to make new buyers responsible for all the back home owner association dues, which basically killed that market (profitability wise for me at least)

      Now when I go in 5 yrs later and look there is a TON of foreclosure land available in other counties without the restrictions of the area I abandoned

      When I stopped I had about 90k in the bank. That slowly drained.
      Now that I realized the error of my ways I am starting back up with this and should be back to the same place I was when I left within about 6 months.
      Will be nice to have lots of savings again.

      For some reason I am much better at land flipping than I am at IM but I am learning IM and CPA
      How does that work exactly? land flipping?
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      {{ DiscussionBoard.errors[6405246].message }}
    • Profile picture of the author Wide
      Originally Posted by outwest View Post

      the DUMBEST thing I ever did was stop buying and selling tax sale foreclosure land in 2006. The area I was buying in decided to make new buyers responsible for all the back home owner association dues, which basically killed that market (profitability wise for me at least)

      Now when I go in 5 yrs later and look there is a TON of foreclosure land available in other counties without the restrictions of the area I abandoned

      When I stopped I had about 90k in the bank. That slowly drained.
      Now that I realized the error of my ways I am starting back up with this and should be back to the same place I was when I left within about 6 months.
      Will be nice to have lots of savings again.

      For some reason I am much better at land flipping than I am at IM but I am learning IM and CPA
      How does that work exactly? land flipping?
      Signature
      {{ DiscussionBoard.errors[6405357].message }}
      • Profile picture of the author outwest
        Originally Posted by Wide View Post

        How does that work exactly? land flipping?
        Buy land from govt tax sales
        sell on ebay for triple the money

        rinse
        repeat
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        Tech article writing .Native English Speaker(with Proof)
        specializing in SmartPhones , Internet security, high tech gadgets, search engines, tech shows, digital cameras.

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  • Profile picture of the author CPAGodFather
    Like most people already pointed out, The chances of going from 0 to 100M in 2 years is going to be difficult without some type of leverage. You'd have to start by building capital and learning about business. Can't acquire companies with air.
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    • Profile picture of the author FitnessNut
      Great food for thought.

      What's interesting is, I feel their is substantial opportunity for acquisition businesses in various markets, within the digital world.

      Be obliged to speak with you more on this.

      Cheers,
      Chris
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      "Any fact facing us is not as important as our attitude toward it, for that determines our success or failure."
      -Norman Vincent Peale

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      • Profile picture of the author brute77
        Originally Posted by FitnessNut View Post

        Great food for thought.

        What's interesting is, I feel their is substantial opportunity for acquisition businesses in various markets, within the digital world.

        Be obliged to speak with you more on this.

        Cheers,
        Chris
        here's a guy who understands this shit.. unlike u non-believers.

        go take a look at all PE and investment firms.. they are building billions of dollars of assets in a short few years using leverage.
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  • Profile picture of the author bahari
    hope to raech it soon
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  • Profile picture of the author pacelattin
    Ok, let me get this. You aren't making $100M a year, but you'll sell me a course on making $100M a year?

    Hmmm... does anyone else call bull**** on this one?
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  • Profile picture of the author CyborgX
    I am working hard so that I reach to that mark very soon. And your methods would give me some boost for sure.
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  • Profile picture of the author PPC-Coach
    If anyone saw Anchorman 2, (and didn't walk out after the shark crap), the Aussie tv station owner says this:

    "I took the $300 million my family left me and turned it into $305 million!"

    So to us peasants, making $5 million in profit is pretty sweet! To someone with 300 million, that's crap. It's all about what you have to put in really.
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  • Profile picture of the author TheUser
    Perhaps if you bought a small bank, then lent yourself money to as a buyout firm.

    That's high-level stuff though. Why not just try to get straight into finance?
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  • Profile picture of the author thisisraz65
    lOL, first make your 1 million than dream to make 100 million
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