Entrepreneurship is a risky game, but you can significantly reduce that risk with strategic acquisitions. This method allows you to take over existing businesses that already have proven cash flows and established customer bases. Being particularly interested in acquiring a company, I talked to Lisa Forrest, an expert at Live Oak Bank, about facilitating these types of smart business moves through SBA financing. In this episode, she explains how to use these loans effectively to secure successful acquisitions and create more prosperous entrepreneurial journeys.

About Lisa Forrest

Lisa Forrest is the Co-Director of Sponsor Finance/Searchfund Lending at Live Oak Bank with over 30 years of experience in banking. She focuses on helping small business owners with both SBA and Conventional lending. Lisa is well-known across the country for her expertise in M&A deal structuring, especially within the Searchfund community. She helps entrepreneurs buy established companies and reduce risks by finding the right financing solutions.

Lisa is particularly passionate about educating and supporting the next generation of business leaders, providing resources like cash flow models and executive summaries to simplify the acquisition process. Her hands-on, approachable style makes her a trusted partner in the acquisition space.

How Can Strategic Acquisitions Help Business Growth?

Growth is the core purpose of every business, but there are many ways to achieve it. Strategic acquisitions might not be the most obvious method, but they offer entrepreneurs a path to growth with less risk and access to immediate cash flow. Experts like Lisa Forrest guide entrepreneurs in making smart, sustainable acquisitions.

Strategic acquisitions can also help with:

1. 1. Diversification: By acquiring businesses in new industries or product lines, entrepreneurs can reduce dependence on a single market and protect themselves from downturns.
   2. Market Reach: Acquiring an established company with a loyal customer base allows entrepreneurs to expand into new geographic areas or tap into different customer segments, speeding up market penetration.
   3. Strategic Positioning: Acquisitions can help businesses strengthen their position by acquiring key competitors or businesses with complementary skills or technologies, making them more competitive in their industry.

However, while strategic acquisitions offer many advantages, they also come with certain risks. Integrating two businesses can be complex, with potential challenges in merging company cultures, aligning operational processes, or managing financial burdens from the acquisition. If due diligence isn’t thorough, there can be serious liabilities or lower-than-expected returns.