Ken Eyjolfson·April 7, 2025

When Buying a Retail Business Makes Sense | Ken Eyjolfson Interview

Ken Eyjolfson is a full-time firefighter in Vancouver, Canada who — alongside his firefighter partner Eric — bought Mr. Liquidator, a single-location warehouse-style mattress retailer in the Greater Vancouver area, in 2024 for $815,000 (roughly 1.6x SDE of ~$500k) after a four-year search. The business sells brand-new Serta and Beautyrest mattresses plus a proprietary imported Chinese brand (Rockwell) out of a warehouse showroom where mattresses remain in plastic bags to signal deal-pricing, generating $1.9 million in 2024 revenue. The deal was financed with a 75% BDC bank loan, a ~12% vendor take-back (seller note) at 5% interest over 5 years, and roughly 13.5% equity split between the two partners (each under $100k out of pocket). Ken previously built and sold a Soccer Shots franchise in Canada, exiting during COVID at 3.5x; that experience taught him what not to do with personal expense add-backs and the importance of clean financials for a future sale. Key challenges include key-man risk on the long-tenured manager, an inherited legacy of cash-heavy and semi-opaque seller practices, and the cost and geographic difficulty of expansion closer to downtown Vancouver. Growth levers being pursued include a rebuilt website and digital marketing function, pop-up shops to test new markets, wholesale supply to smaller hotels and motels, and eventually additional retail locations.

Deal facts

purchase price: $815,000 (plus ~$50,000 inventory, ~$865,000 total)
multiple: ~1.6x SDE (low multiple noted)
sde ebitda: SDE just south of $500,000
revenue: $1.9 million (2024)
financing structure: 75% BDC bank loan + ~12% seller VTB (5-year term, 5% interest, interest-only payments, balloon at year 5) + ~13.5% equity out of pocket split between two partners
notes: Inventory of $50k included separately above purchase price; partners each contributed less than $100k equity. Business was cash-flow positive from day one. No SBA equivalent used — Canadian BDC (Business Development Bank of Canada) used instead.

Why this business

Ken was drawn to the business because of its operational simplicity compared to his prior service business with 5,000 kids and 40 coaches. He liked that it required no specialized trade skills, had strong Google reviews (700 five-star), a large Facebook following (35,000 followers), an established wholesale agreement with Serta and Beautyrest (hard to replicate), and that the manager was staying. He saw a low multiple and significant upside from professionalization, digital marketing, and a bad website that was an easy lever to pull.

What's working

Warehouse retail model with mattresses still in plastic bags creates a 'deal' perception and instant gratification — customers can take a mattress home the same day
Exclusive wholesale agreement with Serta/Beautyrest (largest dealer in British Columbia) provides significant pricing power and a barrier to entry
Proprietary imported Rockwell brand mattress (mattress-in-a-box from China) at low price point sells in high volumes
Strong existing social proof: 700 five-star Google reviews and 35,000 Facebook followers built by prior owner
Low operating cost structure: warehouse lease, no comfort guarantee return policy, lean team of 3-4 people plus two owner-operators
Cash business with no accounts receivable — customers pay before taking product
Experienced manager (8 years selling mattresses) stayed on and is highly engaged; Ken bumped his pay and passes manufacturer sales bonuses to staff
New digital marketing hire and fractional CFO added professional infrastructure
Online mattress retailers (Casper etc.) appear to be declining, which is driving customers back to brick-and-mortar

What's hard

Key-man risk: the manager is essential to day-to-day sales and operations; if he left the business would grind to a halt
Seller trust issues: prior owner ran cash deals, had questionable customer relationships including customers paying large cash amounts, and overinflated prices before offering discounts — required careful due diligence to get comfortable
No online presence at acquisition: website was effectively a broken landing page with a non-functional MapQuest link
No processes or customer service policies in place; inherited some unhappy customers who were publicly negative on Facebook
Supplier concentration risk: entire business model depends on the Serta/Beautyrest wholesale agreement
Geographic limitation: brick-and-mortar location is about an hour outside Vancouver; many potential customers say it is too far to drive
Partner Eric lives 1 hour 15 minutes away in North Vancouver (traffic notorious), so is less present in the store
Neither owner is paying themselves yet

Notable quotes

When I saw that I was like this is something I can work with.

If you look at it retrospectively, he was probably under representing the business size because he potentially was doing cash deals. And so there was actually more sales in there and potentially better margins cuz he probably would just write off the stock and then sell it for cash.

We've been cash positive since day one.

People come in, they see stacks of mattresses. They see plastic all over everything and they want a deal, right? They want to walk out knowing that they just got a smoking deal on a mattress.