Want to Sell Your Company? You Might Need to Buy One First.

The Counterintuitive Exit Strategy: Buy Before You Sell

Selling a company is rarely as simple as finding a buyer and signing the paperwork. For many business owners, the path to a successful exit begins long before the sale process—and sometimes, paradoxically, it begins with an acquisition. Under the right conditions, buying another business can resolve the very issues that make a company difficult to sell, turning weaknesses into strengths and risk into opportunity.

One of the most common challenges in middle-market transactions is customer concentration. When a single client represents a majority of revenue, the business’s stability depends less on its own performance and more on the continued favor of that customer. In such cases, the owner may feel in control, but the reality is that the customer holds the power. Addressing that imbalance organically can take years of new client acquisition and marketing expense, yet acquiring another firm with a broader or complementary customer base can dilute that risk almost overnight. A business that once relied on one client for two-thirds of its income may find that exposure reduced to one-third simply by merging with a company of comparable size. The resulting enterprise is stronger, more balanced, and more appealing to potential buyers who prize predictable, diversified revenue streams.

A similar dynamic applies to management depth and key-person risk. Many private companies depend heavily on the founder’s direct involvement. The owner may be the face of the business, the chief problem-solver, and the keeper of client relationships. While this commitment often drives early success, it can later suppress value because buyers worry that the company cannot function without its leader. Acquiring another firm can instantly broaden the leadership base, spreading responsibility across a larger team and reducing dependency on a single individual. When an organization demonstrates that it can operate smoothly without its founder’s constant presence, it signals maturity and transferability—qualities that consistently command higher valuations.

Scale is another factor that acquisitions can solve more effectively than organic growth. Many owners reach a point where they are running a profitable, stable operation but lack the critical mass to attract institutional buyers or professional investors. Growth beyond that point requires not just more sales, but more capacity, more systems, and more financial heft. Acquiring a peer or complementary business can push the company over that threshold. With greater scale come operating efficiencies, stronger margins, and the ability to compete for larger contracts. Each of these factors makes the business more compelling in the eyes of a buyer.

The idea of “buying to sell” feels counterintuitive, but in practice it often produces the best outcomes. A well-chosen acquisition can address concentration risk, strengthen management, and achieve the scale necessary to elevate valuation multiples. The key is to approach the process deliberately—identifying targets that align strategically, structuring transactions that make financial sense, and integrating them with intention. Small and mid-sized companies do this successfully every day, often with dramatic results.

Acquisition is not a strategy reserved for large corporations. Some of the most effective transactions occur among privately held businesses with revenues under $10 million, precisely because the relative impact is greater. The owner who acquires thoughtfully can transform a business from one that feels unready for sale into one that buyers actively pursue.

For companies constrained by customer dependence, leadership concentration, or limited scale, the solution may not be to prepare harder for a sale, but to think like a buyer first. Sometimes the most direct path to selling a company is the one that begins with purchasing another.