Kirk Olson·February 3, 2025

How to Move the Needle in a $600k SDE Trades Business | Kirk Olson Interview

Kirk Olson, an Army veteran turned real estate investor from Northern Indiana, bought Mike's Fencing — a 40-year-old fencing contractor in the South Bend/Elkhart market — for $2.3m in April 2024 using an SBA loan with no seller financing. The deal was unusually tortured: the sellers had blown up 4-5 prior transactions (including one with the guest who introduced Kirk) by insisting on collateralization of seller notes that no SBA lender would permit; Kirk ultimately dropped seller financing entirely to get across the finish line. The business generates ~$2m revenue and ~$600k SDE with exceptional ~60% gross margins driven by premium pricing and a strong local brand built since 1983. Post-close, Kirk faced a scary summer slowdown as post-Covid residential fence demand normalized and price-sensitive customers shifted to cheaper competitors; he responded by building job costing infrastructure from scratch, launching Google Ads, implementing a CRM (Job Nimbus), and revamping the website — and by late 2024 the business was running two-plus crews booked into February, a stark reversal of the prior pattern of one crew working four days a week through winter. His longer-term growth ambitions include winning more commercial/GC bid work and eventually opening a second location in Fort Wayne.

Deal facts

purchase price: $2.3m
sde ebitda: SDE ~$600k
revenue: ~$2m
financing structure: SBA 7(a) loan 90% + 10% buyer equity; no seller financing; real estate included, appraised at $440k; $100k working capital line included in loan package; Huntington Bank lender
notes: Asking price was $2.3m inclusive of real estate. Real estate was listed at $45k on LOI but appraised at $440k, extending amortization from 10 to 13 years via blending. Accounts receivable excluded from deal; buyer received ~$194k in customer deposits at closing (50% deposits on outstanding jobs). $25k deposit required by sellers, negotiated to be refundable under specified circumstances. Buyer removed ~$60k from SDE calculation anticipating need to hire for bookkeeping role (ultimately not needed). Business founded 1983; current owners operated since 2001.

Why this business

Kirk initially looked for home services businesses (HVAC, plumbing, electrical) that served his real estate portfolio directly, but found nothing local that met his criteria. A connection through former guest John Murphy — who had previously tried and failed to buy this same fencing business — brought Mike's Fencing back to his attention. Kirk chose it because of its exceptional margins (~30% SDE on $2m revenue, ~60% gross margin), long operating history (since 1983), strong brand recognition in the market (signs everywhere), and because the financials showed the Covid bump had normalized back to a stable baseline. He also saw clear upside: no marketing, no CRM, arbitrary job costing, and an absentee-ready team.

What's working

Premium pricing strategy inherited from prior owners, generating ~60% gross margins vs. industry norm of ~50%
Strong brand name and market recognition — 'their signs really are everywhere' in Northern Indiana
50% customer deposit model means materials are fully funded before work begins, creating favorable working capital dynamics
Google Ads and local service ads (Google Guarantee) implemented post-acquisition, driving new leads
New website built by fencing-specialist vendor, significantly improving digital presence
Job Nimbus CRM implementation providing sales pipeline visibility and estimated workflow for multiple estimators
Improved job costing spreadsheet enabling estimators to price by materials + labor days with target gross margin baked in
Culture improvement — Monday morning meetings, team raffles for South Bend Cubs tickets, respectful management style replacing previously hostile environment
Hired a skilled installer poached from main competitor, gaining inside knowledge that competitor is poorly run
Two-crew operation now running year-round booked into February, vs. prior pattern of one crew working only 4 days/week Nov-Feb

What's hard

Summer 2024 was unexpectedly slow — post-Covid demand normalization meant price-conscious residential customers were choosing cheaper competitors; backlog dropped from 6 weeks to 2 weeks and Kirk experienced significant personal anxiety, waking at 1-2am regularly
Extremely difficult sellers — the business had gone through 4-5 failed transactions before Kirk closed, largely due to sellers demanding full collateralization of seller notes (a non-starter with SBA as senior lender); Kirk ultimately had to drop seller financing entirely to get the deal done
No job costing system existed — labor costs were priced arbitrarily ('we charged more and still got work, so we left it there'); Kirk spent all of May rebuilding this from scratch
No marketing whatsoever under prior owners — Kirk had to build Google Ads, claim/merge Google Maps listings, and redo the website from zero
No CRM — estimator pipeline was spread across physical folders, call sheets, and filing cabinets requiring Kirk to bug multiple people to understand the business state
Accounts receivable lag — QuickBooks showed profit that wasn't yet in the bank due to AR; took Kirk time to internalize the cash flow reality
Legacy employees resistant to change (CRM adoption, CAD drawings via Arcsite vs. hand-drawn sketches)
No defined manager/supervisor in place — three people share informal leadership creating potential for conflict
Commercial bid work (GC jobs) historically never won due to being priced too high; Kirk wants to crack this channel
Sellers never agreed to employee introductions pre-close, so Kirk met the team for the first time on Day 1

Notable quotes

It's less hostile now than it was.

I need to have a total life upgrade. I didn't need to — I wasn't going to compromise on some things to get some other things, because in reality I had everything that I wanted, that I needed.

How'd you come up with that amount? And she said, well, we used to charge less and we started charging more and still got work, so we just left it there.

I don't care what happens — I just don't want to lose the house that we live in. That's how worried I was at one point.