It can be a bit of headscratcher when you read stories about the estimated worth of big companies. Apple is worth $1Trillion. Amazon owner Jeff Bezos is worth a reported $109.1 (don’t forget the point one) billion. Even pub chain Wetherspoons recently reported they’re going on a £200m spending spree over the next few years to open more pubs at a time when three pubs a day, on average, are closing in the UK.

They might be some very big numbers, but it’s the level of growth these big names can achieve that is impressive. How companies grow, add value and generate more money can happen in several ways.  Knowing how they do and why it happens can help anyone see how the same basic principles can apply to businesses at any level. Here is some information on how it all works.

How companies grow:

• They seek corporate finance
• They merge
• They ask for private help
• They always have debt

They seek corporate finance

Like me or you walking into an accountant’s office and asking if they can help see what the future holds for personal investment, companies will go to corporate finance brokers to see if there are ways to grow. 

Business owners should be able to look after their company without needing a degree in corporate marketing and that’s why getting experts in to maximise business growth is essential.

An expert can lead a company to some of the next steps in growth I’m about to mention.

They merge or acquire

A little bit of that. A little bit of this.

Big companies like to absorb others and merge to generate money. For example, Google used to be one big company in itself, but now it’s a subsidiary of Alphabet, a bigger company that is the parent of lots of things Google own and operate.

Here in the UK, we recently had the significant example of Thomas Cook being acquired by Fosun International for just £11 million (not billion), as a bit of a bargain that sees a more prominent company acquire a smaller one. By taking bits here and there, companies can grow.

They ask for private help

Oh, it’s a little sneaky to do business behind closed doors, but when the majority of companies in the UK are private, it’s possible to raise money and help companies to grow whichever way you want. 

Private equity is still the way to go, especially for start-ups. You’ll read stories about companies that go into round after round of private funding to acquire equity. It’s a way to show your company is growing by stating you’re worth a certain value.

Of course, the flip side of this is that companies bringing in money are essentially taking on loans, and that leads to debt.

They always have debt

If you’re a big music lover or someone who is always checking stories on Instagram, you’ll recently have seen everyone posting their “Wrapped” status from Spotify that highlighted everything they listened to this year. 

Spotify is a behemoth in the music world, and no matter what your opinion on how the platform pays artists, you might be surprised to know that Spotify (in 13 years of existence) only made a profit for the first time in 2019.

That’s one of the biggest apps in the world having never made a penny of profit for over a decade. 

Many big companies will have debt for a long time too and can continue to keep operating without shutting up shop. A great example of this is Anheuser-Busch (AB) InBev. They’re the company that owns Budweiser, Becks, Corona, Jeffe and so many other big-name beer brands. Much like how I mentioned a few paragraphs ago about mergers and acquisitions, AB InBev bought competitor Miller a few years ago, essentially putting them in debt from an acquisition in order to grow.

It goes to show that even the biggest companies in the world can run without operating a profit.