Insights on a
Merrick & Company
As we strategize, plan, and manage our
growth, Merrick stays on the leading edge
in our focused markets as well as in the
economical, social, political, and legislative
worlds. From time to time, we’re providing
insights on this changing world from our
top management team as an additional
resource. This quarter our “Insights”
come from Dave Huelskamp, president
of Merrick & Company.
Growing Your Business Through Multiple Avenues
The changing economy and shift to a global community demand new approaches to business success. Engineering firms, architects, energy companies or attorneys are quickly learning that a company’s future is contingent on more than just organic growth. That’s the solution Merrick defined almost ten years ago as the route of employing multiple and diverse avenues to growth. Since that decision, Merrick has continually invested in its future by investing a portion of profits through those multiple avenues every year.
The path Merrick has chosen? We’ve moved beyond a singular approach of organic growth and involve ourselves in initiatives, acquisitions, and the international market to accomplish our financial and growth objectives.
Initiatives are the opportunity to move into new markets a step at a time. Rather than moving into a market with a major investment and accompanying risk, an initiative allows the company to test a market and gradually proceed. The new market is typically complementary to an existing market you’re serving so experience and market knowledge will transfer. Market research further supports that decision to enter the new market.
For example, Merrick is in the energy market and has been in biofuels/bioprocessing for 16 years. To further expand our service offerings within energy, we chose to gradually move into wind and solar. Following a key hire and research that began three years ago, we’re now seeing a gradual building of revenues and relationships that will carry the initiative forward.
Acquisitions provide the opportunity to gain resources, i.e. additional revenue, additional staff, key expertise or a new geographic footprint through the purchase of another firm. Merrick has a very specific process for acquisitions and it starts with our mergers and acquisitions consultant, Morrissey Goodale. To start, Merrick defines our vision and desires and Morrissey Goodale conducts the appropriate market research and initial contacts. From that a short list of potential firms is developed and Merrick begins conversations.
We’ve been involved in those types of conversations over the past two to three years. The screening process takes time and you should be prepared to make a long-term investment in both funding and professional resources to see the optimum results.
Fifteen to twenty years ago, companies the size of Merrick weren’t considering the international market. Now mid-size companies are moving more aggressively and taking advantage of growth in other countries. Merrick took those steps five to ten years ago with offices in Ontario, Canada, Guadalajara, Mexico, and Mexico City.
At a minimum, US companies should look north and south of the borders for international growth opportunities. GDP growth is an indicator for opportunities as well as market fit, ease of entry into the market, and costs associated with entering. Considerable homework must be done but the results are well worth it as you consider the additional market audience you’ll be tapping into.
Organic growth shouldn’t be put to the side. It’s still a strong component of a company’s success however, for optimum results a company should pursue multiple avenues of growth. Regardless of the mix of approaches a company may choose, it still requires a long-term investment. Those companies who chose to jump into a market and expect quick results are the ones that will continue to ride the highs and lows of any economy.
At Merrick, over the next five to ten years, we anticipate a shift to 55% of our revenues coming from organic growth and 45% of revenues from the combination of initiatives, acquisitions, and international work. Our investment ten years ago is paying off but it’s required patience. The biggest pay-off for Merrick is the long term stability and steady growth for the company.