Vertical Integration is when you acquire (or become) a supplier or customer of your current business. It is growth via supply chain.
Here are the 3 most common ways for a small business to vertically integrate:
Buy a building and become your own landlord.
Start a new business that becomes a supplier of your current business.
Look for a business to buy that is already a supplier.
The most common way that a small business Vertically Integrates is by buying a building rather than leasing space. Real estate is generally a much safer integration than buying or building another business.
Vertical integration is an immediate win/win. Both businesses benefit right away.
Typically the downstream business (the one closer to the end customer), will get better products, terms or service. Meanwhile the upstream business will get a reliable customer relationship.
Warning: Vertical Integration is an expert-level hike. I call them “Class 3” hikes in my program, and they’re not for everybody.
However, when you bolt together two businesses like this, it opens up a lot of options for growth on both ends of the deal.
Think vertical.
Onward and upward,Simon Trask
(I’m a small business owner, advisor, and advocate – learn more here)
This is author and founder of Profit Hiker: 11 Trails to gain lasting elevation in your business. Find the book right here and the program over there.
Powered by beehiiv
