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Welcome to The Main Street Minute, your shortcut to small business acquisitions.
👋 Huge shout-out to the new readers who joined the newsletter last week.
Today’s story: A corporate exec chases a 13-year-old HVAC business with declining sales, looking to trade boardrooms for boiler rooms.
Dive in below…
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Every week, we take one real small business deal straight from our community and put it under the microscope, right here.
We break down the numbers, the story, and the risks, so you can see exactly how real buyers and deal experts think.
This week’s target: a 13-year-old HVAC business with <$1M in revenue and ~$180K in SDE.
The seller’s story? After more than a decade in the field, he’s hanging up his wrench for a corporate gig and moving out of state.
That’s opened the door for this first-time buyer, a 25-year corporate veteran in sales and marketing, to make the leap into small business ownership.
Here’s what he’s looking at:
After the owner downsized from 4 techs and 2 admin staff to just 1 loyal, licensed technician, the business became far leaner and margins improved, but that, along with zero marketing spend (and no dedicated growth function), led to a decline in top-line revenue
The buyer’s thesis: With marketing muscle and operational focus, this could be a tight, high-margin turnaround play. The risk? Consistently declining sales, a single tech, and a seller moving on.
So… Is this a smart seller-financed entry point, or a first-time buyer’s trap?
Let’s dig in.
The community’s feedback touched everything from timing to deal structure to psychology. Here are 5 key takeaways:
The buyer’s deal looked “approachable.” A $500K business with seller financing and a local footprint. But as one deal coach put it:
A $180K SDE business can be great. But understand the math; after financing and taxes, that might mean $120K in actual cash flow… if nothing goes wrong. And in small deals, something always goes wrong.
Lesson: A larger company can more easily absorb a bad hire, a weak season, or a learning curve. A small one can’t do this as easily since the “surface area of shock” is smaller. Tiny deals seem safer because they cost less. But every stumble hits the bottom line more seriously.
Every sale has a subtext. When a 13-year owner trades self-employment for a corporate job, that’s worth questioning.
If an owner is leaving for security, predictability, or sanity, those are the same things you’ll be inheriting the absence of. That single insight reframed the entire deal.
The buyer described the deal as “encouraging.” The owners had cut staff, marketing was nonexistent, and yet revenue was “only” down around 15%. To him that looked like opportunity, but not to our deal consultants.
Turnarounds can look seductive. But if your strengths aren’t well aligned with the problem set, it’s extremely risky.
Framework: When you’re pulling the nose up on a declining business, you need altitude, and this business just didn’t have it.
The group also dove into an issue that quietly kills many trade deals.
In HVAC, electrical, plumbing, and other skilled trades, proper licensing is a required asset. Without it, you can’t do business. In this case, an asset purchase triggered a chain reaction of questions around new license filings.
If those answers don’t come clearly, your timeline and your deal are at risk. That’s why experienced buyers often map the “license path” early on.
Many new buyers fight the same temptation: the urge to just get in the game.
You find a business that feels attainable, you get a seller on the phone, and your mind says this could work. Suddenly, the abstract goal of “ownership” feels very close.
But in small business buying, jumping the gun just 1 month in can hurt you down the road. Likewise, some early patience can pay dividends. Here’s what one deal consultant had to say:
Form your pattern recognition. In the world of acquisitions, “reps before results” isn’t motivational fluff. In the early months, your job isn’t necessarily to close a deal; it’s to calibrate your judgment so you know which deal to close.
The HVAC and plumbing contractor industry is massive. Roughly 107,000 companies, 1.3 million workers, and $306 billion in annual revenue. HVAC is one of the most fragmented industries in America. Tens of thousands of small operators compete for the same residential service calls, while private equity-backed rollups and national franchises consolidate from above.
The result is a barbell market:
It’s a massive market. But “massive” doesn’t mean easy. It means crowded, and it faces some difficult headwinds.
The buyer’s target business was 100% residential service.
Here, the ability to recruit, retain, and incentivize technicians will be critical.
A few days later, when asked where he stood on the deal, the buyer summed it up simply:
This deal forced the buyer to further define what he will and won’t buy before falling in love with the next opportunity. As one advisor put it:
“Now go back and update your Deal Box. Color it with what you liked and didn’t like, so you can discern faster next time.”
The Deal Box is the buyer’s operating truth that defines 3 things:
The best buyers iterate their Deal Box constantly. Every review, every near-miss, every red flag sharpens it.
“One of the things I really press our new members to do is get a deal review done in their first 30 days. Huge congrats that you just did that. Even if this isn’t the deal that you go forward with, you’ve learned a lot, and it’s going to make the next deal that you look at easier to evaluate. This is experiential learning. A lot of new folks are hesitant to do what you just did.”
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The information contained here is educational, may not be typical, and does not guarantee returns. Background, education, effort, and application will affect your experience and the profitability of any business. Individual results may vary.
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