Business Growth through Strategic Acquisitions with Lisa Forrest, Live Oak Bank

Beyond 8 Figures

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.

Key Insights:

• Develop your own acquisition criteria. Define what type of business fits your goals before looking for companies. Consider industry, size, location, and cash flow. This helps you target businesses that align with your long-term vision and reduces wasted time looking at the wrong opportunities.
• Use cash flow models to evaluate deals. Before committing to an acquisition, use cash flow models to assess a company's financial health. By running scenarios, you can ensure the business will generate enough income to cover debt and other expenses after purchase.
• Take advantage of the “Silver Wave.” Many baby boomer business owners are retiring and looking to sell. Explore industries where this is happening to find well-established businesses available at reasonable prices.
• Maintain financial discipline. It’s important not to overpay or over-leverage when acquiring a business. Ensure the acquisition makes financial sense by carefully analyzing the business’s cash flow and ensuring there is room for market shifts or operational challenges.
• Prepare for post-acquisition integration. You need a plan for integrating the acquired business, including merging teams, operations, and cultures. Having a clear integration strategy minimizes disruption and improves operational efficiency.

Lisa's best advice for entrepreneurs:

“Cash flow is gonna be king and making sure you're not overpaying for a company, and you're not overleveraging it.”

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