Acquiring Minds

Finding A Good Business After 2 Years Of Searching

with Ryan Doyle · Jeff's Pool and Spa Service

LenderHawk analysis. Not affiliated with or endorsed by Acquiring Minds.

The Deal

Business

Jeff's Pool and Spa Service

Industry

Pool maintenance, service, and retail chemicals

State

Year

2023

Financing

SBA 7a

Deal Source

proprietary

Financing Structure

SBA 7(a)

Strategic Rationale

Buyer sought to acquire a recurring revenue business serving high-income customers in an attractive coastal market with potential for geographic expansion and management team buildup.

Post-Acquisition Performance

Business experienced significant operational disruption when de facto general manager ghosted weeks after close, forcing owner to reverse-engineer all back office processes; overcame liquidity crisis through resourcefulness and support network; subsequently stabilized operations, made key management hires, and positioned for growth in next season with clearer understanding of systems and bottlenecks.

Key Takeaways

1Walking away from a deal with major red flags despite sunk costs and emotional fatigue is necessary self-discipline that can lead to better opportunities.
2Hire a professional quality of earnings provider early; the objective third-party analysis and emotional support during diligence is worth the cost and saves stress.
3De facto key person dependencies in small businesses create existential risk; loss of critical knowledge holder can paralyze operations without proper documentation and redundancy.
4Recurring revenue businesses provide better stability and downside protection than project-based businesses even if margins are theoretically thinner.
5Operating in premium market segments with affluent customers willing to pay for quality provides pricing power and reduces need to compete on cost alone.

Matched SBA Loan Records

SBA loan filings we matched to this deal

Summit CU85%

$10KP + 3.00%FY2019

The Huntington National Bank85%

$15KP + 3.75%FY2014

Manufacturers and Traders Trust Company85%

$25KP + 6.50%FY2015

The Deal

Business

Jeff's Pool and Spa Service

Industry

Pool maintenance, service, and retail chemicals

State

Year

2023

Financing

SBA 7a

Deal Source

proprietary

Financing Structure

SBA 7(a)

Strategic Rationale

Buyer sought to acquire a recurring revenue business serving high-income customers in an attractive coastal market with potential for geographic expansion and management team buildup.

Post-Acquisition Performance

Key Takeaways

1Walking away from a deal with major red flags despite sunk costs and emotional fatigue is necessary self-discipline that can lead to better opportunities.

2Hire a professional quality of earnings provider early; the objective third-party analysis and emotional support during diligence is worth the cost and saves stress.

3De facto key person dependencies in small businesses create existential risk; loss of critical knowledge holder can paralyze operations without proper documentation and redundancy.

4Recurring revenue businesses provide better stability and downside protection than project-based businesses even if margins are theoretically thinner.

5Operating in premium market segments with affluent customers willing to pay for quality provides pricing power and reduces need to compete on cost alone.