For us to continue growing in a meaningful way and realize value, we knew we needed access to additional resources and expertise.

Since starting TeamUp ten years ago, my co-founders and I had been very pleased with the company we built and growth we achieved up to this point. By early 2022, we were a leader in our space, selling user-friendly management software to thousands of fitness studios and gyms. But for us to continue growing in a meaningful way and realize value, we knew we needed access to additional resources and expertise that could help mature our sales, marketing and product functions, as well as enable TeamUp to break into new markets.

With those goals in mind, DaySmart – a larger, well-capitalized business management software provider serving multiple verticals, including fitness and recreation – ended up being the right partner for us. We were acquired by DaySmart in September 2022 and are off and running on the next stage of TeamUp’s growth plan.

Looking at the economy today, I can confidently say if we had started the acquisition process six months or a year later — and saw the market conditions on the horizon — the need for and benefits of DaySmart’s resources and expertise would have increased exponentially.

Knowing that many other business owners may find themselves in a similar position this year, I want to share some of the benefits your company can reap from being part of an add-on acquisition at any point in time, but specifically in a challenging market.

Key benefits of being part of a strategic acquisition in a challenging market

1. Availability of resources and expertise for quicker growth

When joining forces with a larger company, you gain access to all of their expanded resources and know-how, allowing for swift iteration and expansion — and instilled confidence that a continued growth mindset is built into your strategy.

Most important for us was the ability to idea-share across different verticals. Between DaySmart and TeamUp, there are six different vertical business management products that, in many ways, are all similar in design and value proposition. Idea-sharing has been instrumental in enabling all teams and their associated products to benefit from each other’s successes, failures and lessons learned.

Product-led growth and realizing new revenue streams

I come from a product-focused background, so I firmly believe that product-led companies focused on growth make for the best results, and that an excellent product at the center of most business decisions leads to great outcomes.

By offloading non-product-based responsibilities like legal and HR, smaller company leaders like me can focus on what we do best: Refining and optimizing our product line. More importantly though, the connections you make between products are foundational in building further offerings and rolling out additional features that your customers desire.

Product teams across the company can share invaluable technical knowledge and solutions. You can learn about how other teams rolled out products or features to customers and leverage this knowledge in your own development efforts. Very quickly after joining DaySmart, we saw opportunities around payments, text messaging notifications (SMS), subscription structures, marketing and positioning that could enable the realization of additional revenue streams for TeamUp.

DaySmart’s acquisition of TeamUp has helped us to remain competitive by developing a strategy to enter the U.S. market as nimbly as possible.

2. Remain competitive when it matters most

There is a lot of M&A activity within our vertical and those like it. While the B2B SaaS world is generally market-resistant, it’s not completely immune. DaySmart’s acquisition of TeamUp has helped us to remain competitive in many ways, but most importantly by developing a strategy to enter the U.S. market as nimbly as possible.

For example, one key part of our U.S. expansion strategy, and where DaySmart’s experience was exceptionally useful, was pricing. DaySmart helped us to ensure that the value we provided was priced right according to our feature set, customer profile and competitors in the U.S. market. Making good decisions and maintaining this greater level of discipline about your pricing and how it compares to the market is important in all economic climates, but things like feature rollout order and adjusted pricing matter even more when times are tough and your customers are focused on cost-cutting.

To retain the best talent, you must find a way to provide options for career growth.

3. Your talent can progress to new heights

One often overlooked benefit of joining a larger entity is the opportunity for employees of the acquired company to move upward in their careers through promotions, lateral movements or new growth within their current roles.

A smaller business can only offer so many opportunities for ambitious employees — for example, not everyone can be promoted to a managerial role. To retain the best talent, you must find a way to provide options for career growth. Hiring great people for current positions necessitates that they have a clear view of upward movement in the future, and being part of a larger company only increases those opportunities. Employees also look for stability through challenging economic times, so having a well-established company to back you helps to ease those concerns.

With DaySmart, our employees have more career options through chances to move laterally or upward within the larger company structure. I hadn’t considered this as a direct benefit when we pursued a strategic partner, but now I see it as one of the biggest value-adds.

The important aspect is to ask and understand what things are going to be like after you sign the deal.

My top advice for choosing the right partner

When looking at a strategic acquisition, think of it as a partnership where getting to know your buyers is crucial. “I don’t think people spend enough time figuring that out,” my partner and DaySmart CEO Pat Shanahan said as we talked about writing this GrowthBit. “It doesn’t matter if your revenue and growth profile are great — the most important thing is to operate together as a team. You have to make sure that it’s going to be a good partnership before the deal is signed.”

Know what questions you want to ask during the process — these will differ depending on your business, your culture and your personal vision or goals. The important aspect is to ask and understand what things are going to be like after you sign the deal — don’t let how you will function together as a team be an afterthought. A few questions I asked were:

  • How does your team collaborate on a day-to-day basis?
  • What does “success” look like three months post-acquisition? What about six months?
  • What have previous acquisitions taught you about how to handle integrating teams and processes?

Here’s the bottom line.

In a challenging market, you must be more deliberate and precise in your decision-making to remain competitive. And one of your most critical decisions will be: can I continue to grow on my own, do I need a direct capital partner, or should I join up with another business that can help mine reach its next level of growth?

Being part of a strategic acquisition has the potential to reap benefits in any economic climate, but I have found it to be invaluable when looking at current market conditions. Maturity and discipline are key, both to operate in tough markets, and for meaningful growth. Make sure you know what value you as a business — as well as the product you’re offering — are providing and evaluate all the options that can help accelerate your growth.


This GrowthBit is featured in LLR’s 2024 Growth Guide, along with other exclusive insights from our portfolio company leaders and Value Creation Team. Download the eBook here.