This Week’s Business Buyer (in 10 Seconds):
Henry spent a handful of years in real estate private equity, running the numbers on his firm's deals from Texas eastward.
He liked the work.
But as he puts it, if a house is worth more a few years after you buy it, "you didn't do a whole lot of talking to that house or coaching that house up to really make that value appreciate."
So he wanted a team he could coach, helping people do their job better every day.
And he figured he had "just enough irrational confidence to go out and try to actually do this."
Instead of buying and managing buildings for his private equity firm, he decided to buy a business with a team to lead.
In a small business, a better-coached team means a business that’s worth more.
At first, he searched on the side of his PE job, reaching out cold to owners around Austin, including an artificial turf company.
He took a couple of meetings, but none of them turned into a deal.
Doing it alone was a lot like meaning to get in shape. Lots of good intentions, not much progress.
So he joined SMB Deal Hunter Pro, which he compares to finally buying the gym membership and hiring the trainer.
With our help, he bought an HVAC company near Wilmington, North Carolina, which he runs remotely from Austin.
It’s been around for 21 years, and the deal came in at $8.25M.
The business does about $1.82M a year in EBITDA, with 18 field techs already in place.
The founder agreed to stay for at least 3 years, alongside a General Manager with about 27 years in the industry, so the people who know HVAC best are still there.
The catch was the loan. At about $4.7M, it sat just under the SBA's $5M cap.
That's almost too big for the SBA, and still small for a big bank.
At one point he was talking to 4 banks a day, and none of them had a problem with the deal itself.
The sticking point was the size, which made collateral and everything around it complicated.
He had to get creative to get it funded, with our team helping him through the banking side. How he did it is one of the best parts of the interview.
And even with another buyer bidding more, the seller still picked Henry. It came down to one piece of his offer the seller didn't understand at first.
And for our audio-only listeners, jump in and listen on Spotify or Apple Podcasts!
But if you want to learn a bit more, let's dive into the story…
Hello SMB Deal Hunters!
Have you spent years running the numbers on deals, and wondered if you could ever run a business yourself?
Usually, it's the same doubts...
You don't know the trade, or how to run it day to day
You’d need a license to run it, and you don’t have one
And you'd never be the highest bidder anyway
Henry ran into all 3 on his way to owning an HVAC company.
He spent a handful of years in real estate private equity, working directly under one partner on deals from Texas eastward.
He "really enjoyed" it, but wanted a more interpersonal job.
And owning a business would put him in what he calls the “ownership seat,” coaching a team every day.
So around mid-2023, he started thinking about buying a business.
With years of deal work behind him, he felt like he knew "just enough about this."
But small business deals ran differently.
In private equity, everyone knows the game.
In small business, many sellers "don't know what they don't know."
They know their business inside out, but the way a deal gets structured is often brand new to them.
That gap trips up plenty of buyers.
Yet it’s exactly where Henry won his deal.
But to get there, he had to stop just poking around. As he put it, "you either do it for real or you don't."
So he committed and joined SMB Deal Hunter Pro.
As a quick reminder, SMB Deal Hunter Pro is our business buying accelerator where we help you find, finance, and acquire a business in 6-12 months...or work with you for free until you do.
Today, he owns a 21-year-old HVAC company near Wilmington, North Carolina.
It leans heavily on new construction for builders and developers, with 18 techs: 8 on installs, 8 on service, and 2 on maintenance.
It does about $1.82M a year in EBITDA, and he sees a path to growing that by around 50% over several years.
Here's what a PE background didn't prepare him for on the way to close:
The legal side. He'd touched legal in PE, but running every lawyer call himself was a "very steep" learning curve.
The license. Getting one himself would take about 2,500 hours, roughly a year and a half of doing nothing but HVAC. So how do you buy a licensed trade without the license?
The bank. At about $4.7M, his loan was an awkward size for lenders. If he did it again, he says he might go a bit bigger, or about half as big.
A competing buyer. Another buyer bid more, and the seller still picked Henry. He thinks a seller who wanted to be gone "nine days after the closing" would have taken the other offer.
Before any of that, our acquisition strategists told him straight up which deals were worth his time, so he didn't waste it on ones that were never going to work.
Two months in, here's where things stand:
He runs it remotely from Austin, more than 1,000 miles away. He's been there a handful of times and plans to move closer, but he doesn't "really feel the need to be there all that often."
His team handles the day-to-day. His General Manager, the founder, and the founder’s son (on track to become General Manager in 3 to 4 years) run operations.
So in an ideal week, he's already working on the business, not just in it. He shares how he decides what's worth his attention, and what's "just me kind of kicking rocks."
Small wins come daily. His team just signed an apartment complex onto a maintenance plan, which matters a lot more than it sounds. He explains why a maintenance customer is worth far more than the plan itself.
He's already taking a salary. But he's been thinking a lot about when to take it, in a business with busy and slow seasons.
Click below and watch me walk through his journey step by step 👇
And here's what Henry says made the biggest difference...
"I think you guys did a really great job of avoiding yellow lights. There were some green lights, and then there were a lot of red lights. And I think that's super helpful just from a time management standpoint."
Henry leaned on our deal team to...
Make sense of the accounting as diligence got deeper, with a first and second pass on the numbers
Find a way to fund a loan that didn't fit the usual bucket. He says banking here is "very, very different" from the traditional finance world he came from.
Have people in his corner the whole way. As he puts it, "You definitely feel like people are there to help you in the process."
So whether or not you come from finance, if the small business side is new to you, let's talk.
We'll help you buy a $1M+ business in 6-12 months, even in an industry you've never worked in.
Talk soon,
Helen
👀 Quick Update: October’s not even over yet, and 8 Pro members have already closed deals this month, and another 11 have gone under LOI.
We helped them source these deals (including off-market deals you won’t find on BizBuySell) and worked with them 1:1 to structure winning offers, catch red flags, and secure financing, handholding them all the way to close and through the transition.
On October 31st, we're retiring a bonus worth five figures for new Pro members.
So if you've been waiting for the right time to make a move...