SMBQuest

Excited to announce our 1st add on acquisition. This deal will significantly expand our footprint, strengthen our commercial customer base, and position us to capitalize on the rapid growth along the entire GA coast.

@blueprintsmb22 An hour, not a week for me

Me when asked by friends how often I thought I had screwed up my life the first 6 months post close of buying a manufacturing business with personally guaranteed debt with no experience over 3 years ago

@Slackwatercap Damn you pissed off a local guide?

The joys of SMB ownership... One of your employee's stalker ex girlfriends calls your office every day and leaves not one, but two, 1-star Google reviews plus 22 photos of her personal bank and credit card statements with her account numbers.

@Will_Schryver The first banker that sends me this deck may actually get my business

2 charts explain why Private Equity will pay 18x for an HVAC company And why Chick-fil-A and Ace Hardware are getting into home services $700 billion total addressable market that is highly fragmented and largely recession resistant Source: McKinsey & Company

@Slackwatercap @Will_Schryver

@Will_Schryver There's no way that HVAC and plumbing has the same level of truly recurring revenue as pool and spa service.

@EndresenHeather Ask me how I know 😏

@EndresenHeather Stats don’t matter. With the June ‘25 look through rule + this, search cap tables will never be the same. 1 LLC partnership w/in another entity and suddenly you’re chasing a SSN for 0.001% and god forbid they are an LPR. No multi member LLC with entities are worth taking on.

Had to delete my post on the new SBA policy that makes Legal Perm Resident's ineligible to own any part of as business getting an SBA loan -- went to the political part of X that I don't want any part of. Instead of reporting on the new policy, I'm going to post a poll asking any SBA lenders who follow me to respond so we can try to figure out what % of loans (historically) had LPRs in the ownership structure and would now no longer be eligible.

@alt_w_v_g What do you have against gridlines and why should they be banned from polite society?

Ask me anything

@MikeBotkin_ It’s not a lie if you believe it

There is a guy who is sourcing capital to buy a home service business. ~$5m top line, $3.3m ebitda (that tracks I am sure!). His main pitch? Year 2 — they will do $50m in rev and $23m in EBITDA. How? The plan is to buy 30 adjacent companies at an avg of $1.4m in rev. Year 5 — $100m in revenue at 45% margin. Valued at over $1b (with a b) Man….wish I had his confidence. Go get em tiger. I will have to pass on the SpaceX of home services.

@Will_Schryver Very bullish

Probability of a recession in the next 12 months has dropped to 27%. SMB owners and private equity investors, does it feel like there’s a 1 in 4 chance of a recession?

Just got this reply to my LOI. Seller doesnt want a noncompete!

@BoringBiz_ Ah, the old test email. I remember that well. Must be on a juicy deal. Enslaved is one way to think about it. Another he’s fulfilling his career goal of working at highest corporate finance level and wants to be the best. Both can be true.

Recently grabbed coffee with an old friend who is an Investment Banking VP making $500K+ per year Every five minutes, checks his work phone for emails. Can barely hold a conversation without getting distracted At one point, he starts writing an email to himself with the the subject line “Test” I ask him what he is doing. He says it’s odd that he goes this long without receiving an email so wants to make sure his phone is still working Just goes to show that some people are not just working for money, they are enslaved by it. Regardless of how much they make, they don’t fully own their lives. The worst part is that this friend has allowed lifestyle creep to set in. He spends most of what he earns on expensive rent, watches, wine and everything in between. He is not even close to being able to leave the rat race

When you buy a business, make sure you have the right seller. Some sellers sell their business and want you to succeed, and do everything-within reason- to help you. Some sellers sell their business and want you to fail, and do everything imaginable to stunt your attempt at success.

Who has the latest and greatest non public residential services industry overview deck? Last good one I saw was from TD a couple years ago. Think Harris Williams was a strong 2nd. Preferably with references to pools. Asking for a friend.

@StrongpointRich @Schornack Interesting. Please elaborate on the bank branding concept. Agree, but am curious as a bank nerd. Also have been agonizing about this myself. Think after our next announced acquisition, we will rebrand holdco, but will play it by ear going forward in keeping core opco brands.

@Schornack Appreciate the vote of confidence Andy. People don't realize how much can be learned from banks around branding.

Some will call me crazy for this. Maybe I am. I'm currently rebranding our 3 brands across the Northeast under a single banner. Brands we've built from $4m to $30m over the past few years. Distancing ourselves from the original founder names and leaning into our own brand. Posturing for further expansion. If you're in the Northeast, keep an eye out for High Ground Service Pros.

@SamJonesKCBiz @jjtejkl You’re alleging a greedy lender is facing catastrophic levels of default with no support but the sample is so small that it doesn’t show in the data. I’ll guess we’ll wait and see but haven’t convinced me the sky is falling or even a lone predacious lender exists.

Bank filings aren’t going to discern between govt loans & conventional loans. So it’s still not data that can be easily gleaned from reports. Again, this is one lender, at a snapshot in time. 20% default on SBA loans is not indicative of the health entire commercial portfolio. There have been multiple banks in my career as an SBA lender with a higher SBA default rate than this. In the last 10 years, there are two in my market alone.

So one of the fastest growing SBA lenders in the country is staring in the face of a near 20% default rate. SBA policy was/is not the issue - it’s greedy lenders that try to outrun their losses.

@SamJonesKCBiz @jjtejkl More like 5% at peak with much lower loss given default

@SamJonesKCBiz @jjtejkl SBA loans are risk weighted from a capital perspective differently, but banks still must report delinquencies same as commercial and industrial loans. Also SBA loan data is collected and published by Treasury. We’ve never come close to 20% default rates on c&i, even during GFC.

@SamJonesKCBiz @jjtejkl You know if this were true it would be public data. Even if a private bank, reg filings would show delinquency data. So not sure why you’re being coy other than sensationalizing rumors. Love me a good banking crisis but this would be equivalent to peak subprime mortgage defaults

@jjtejkl Nice try!

This Friday, the ETA Capital Forum brings together operators, investors, and advisors shaping the next wave of small-business acquisitions. I’ll be there with insights on deal structures and post-close growth. Will I see you in New York? Register here: luma.com/sfccf

@KHendersonCo Billboards?

Alright you guys, who's going to break it to him?!