millen | serial entrepreneur

Buying a $1-2m “EBITDA” home service business can be a trap. It is very easy to “game” this level of EBITDA. Many $1-2m EBITDA home service businesses have severely inflated, borderline fake “EBITDAs.” If you are a home service business with $10m of revenue and $2m of “EBITDA”, or $5-6m of revenue and $1m of “EBITDA”, it is very likely that the seller is “EBITDA stuffing” to prepare for a sale. They are doing this by underinvesting in overhead, underpaying their field staff, and a host of other techniques. These sub-scale home service businesses do not deserve to operate with 20-30% EBITDA margins. A home service business with $20m of revenue and $2m of EBITDA is substantially more stable and valuable than a business with $10m of revenue and $2m of EBITDA. In my opinion, they are 2x more valuable with the same amount of EBITDA. If you are under $25-30m of revenue, you should be operating anywhere from 10-17% EBITDA margin if you are truly investing for the business to grow, be stable, and be an employer of choice.

Had a long conversation with a 30-year-old business buyer. Buys distressed home care agency companies in NYC and Connecticut at 1-3x EBITDA multiples. Has done 5 acquisitions so far. It is a lot of work, but he successfully integrates them into his holding company, which trades at 8-10x EBITDA for the right private equity buyer. The best part: he is still able to take a month long holiday and 10-day no cellphone & no talking meditation retreats. Started seven years ago at 23; today still owns 100% of the whole group. Very savvy at financial engineering, structures, real estate... everything. This conversation had it all. But gets even better:

Because that’s what literally happened. My point is the Tesla shareholders approving a “$1 Trillion pay package” is not going to sit well with the majority of people given the increasing class divide and growing resentment towards billionaires. If the lofty milestones are met, you think the average person who is paycheck to paycheck is going to say “you know what, Elon deserves $1 trillion”?

BREAKING: Tesla shareholders approve Elon Musk’s $1 trillion pay package with over 75% voting in favor

Here’s what I think will happen in NYC under Mahdami. The free buses and government grocery stores won’t happen, they never do. They sound good during campaigns, but collapse under basic math. You can’t run a city on ideas that cost billions and produce no revenue. The only way to make housing affordable is to build more housing. The free market lowers prices, not regulation. Every time politicians try to control rent or force affordability by decree, developers stop building and landlords stop maintaining. Supply dries up, the quality collapses, and the few properties that remain skyrocket in price. Once landlords can’t make a profit, they sell, lose properties, or walk away. Eventually, the government takes over. Taxes will rise to pay for the promises, and the middle class will be the ones shouldering the burden. The rich will relocate, the poor will depend on subsidies, and the productive class will be squeezed from both sides. Thriving businesses are the foundation of any thriving city. When they leave, everything else follows, jobs, schools, grocery stores, stability. Chicago already proved this. Boeing, McDonald’s, Caterpillar, Citadel, nearly 70k jobs, all gone. Now they’re facing billion-dollar deficits, half empty schools and neighborhoods without grocery stores. I saw someone who lived in a rent-controlled apartment in California put it perfectly, he said his landlord could no longer afford maintenance so the pool was filled with dirt, the floors had soft spots, and the foundation ended up cracking. That’s what overregulation does, it destroys quality. People who voted for this will eventually feel the pain but they won’t blame the policies or the politicians, they’ll blame the rich for leaving. This conversation is always difficult because most people simply don’t understand market dynamics or incentives. In a free society, people act in their own self-interest. If you remove profit and reward dependency, productivity dies and the city with it. If you think things are expensive now, just wait until they’re “free.”

what controversial opinion will have you in this position?