Dan Verboski·June 27, 2024

Candid Reflections on 7 Years of SMB Ownership | Dan Verboski Interview

Dan Verboski is a Marine Corps veteran and former State Department diplomat who bought Leon Signs, a 72-year-old custom sign manufacturing company in Tyler, East Texas, in October 2017 for roughly $2.7m total (including the real estate), financed via an SBA loan, a $600k seller note, and about $100-150k of his own cash from prior real estate sales. He entered with no sign industry knowledge, never met the employees before closing, and made the critical mistake of not purchasing accounts receivable — driving the business to a near-cash-crisis within three months. The subsequent seven years have been an extended slog: a change-resistant culture, a toxic key employee who held the electrical license and was openly insubordinate for years, a thin labor market of roughly 100,000 professionals spread across 30,000 businesses nationally, and a severe burnout period in 2020-2021. Despite all of this, Dan doubled revenue from $2.7m to ~$6m by 2023 and grew SDE from $650k to ~$1.4m, largely by leveraging the company's 80-year brand reputation and returning phone calls when competitors don't. He has replaced nearly all original employees, implemented EOS, rebuilt the fleet, and is now positioning for geographic expansion into Dallas or Houston and targeting a 50+ employee headcount to achieve true operational redundancy in a specialty trade where talent is scarce.

Deal facts

purchase price: ~$1.6-1.7m (business only) + ~$1m real estate = ~$2.7m total
multiple: ~3.5x EBITDA
sde ebitda: SDE ~$650k at time of purchase
revenue: $2.7m at acquisition; ~$6m in 2023
financing structure: SBA loan (bank) + ~$600k seller note + ~$100-150k equity from real estate sales
notes: Business included real estate (industrial property). Dan did not purchase the AR, which caused a near-cash-crisis within the first 3 months. He subsequently injected an additional $250-300k over the years as loans to himself, repaid over time. Fleet recapitalization cost ~$1.5m in trucks over six years. Latest year (2023): ~$6m revenue, ~$1.4m SDE.

Why this business

Dan was looking to buy a property management business but a sign company came through his network. It was a 72-year-old business with $2.7m revenue and $650k SDE, the numbers looked good, and the bank was willing to finance it. He was broadly entrepreneurial and open to the deal if the bank would approve it — more driven by the financials and availability than deep industry conviction.

What's working

Nearly 80-year-old brand reputation in Tyler, TX — the phone rings without advertising; Leon Signs is the dominant player in the local market with roughly $5-6m of an estimated $14m market
Responsiveness and customer service: consistently returning calls when competitors do not, which Dan identifies as a primary driver of market share growth
Focus on custom, one-off signage (churches, restaurants, local businesses, government) rather than chasing large national chain contracts, positioning the company in a market sweet spot
5-year parts-and-labor warranty on signs, backing reputation with real commitment
COVID windfall hiring: picked up roughly half a dozen experienced sign professionals when a major competitor downsized in 2020
EOS (Entrepreneurial Operating System) implementation, with clearly defined values, accountability, and culture built collaboratively with the leadership team
Population growth in Tyler/East Texas driving organic demand for new business signage
Growing to ~32 employees (from 17) has created redundancy and reduced single-person dependency risk
Dan is now growth-minded about geographic expansion — already licensed and operating trucks in Louisiana, targeting a second location in Dallas or Houston

What's hard

Did not buy the accounts receivable at closing, causing a cash flow crisis within the first 3 months of ownership
Walked into a deeply entrenched, change-resistant culture — flat revenue from 2010 to 2017, indoor smoking still permitted, employees hostile to any new direction
Never met the employees before closing — a mistake Dan says he will never repeat
Replaced two owners with decades of combined sign industry experience overnight, with no sign knowledge himself
A toxic master electrician — who also had two family members in the business and held the company's electrical license — was openly insubordinate for years; Dan felt trapped by the key-man risk and held on too long
Thin labor market: only ~100,000 people in the sign industry across ~30,000 businesses nationally; Tyler is a market of 100,000 people with very few qualified sign professionals
Took no meaningful salary for the first two years (~$25k/year), did not pay himself properly until fall 2020
Sold down nearly his entire real estate portfolio (from ~10 properties to 1) and injected $250-300k of personal loans to keep the business solvent in early years
Burned out severely in 2020-2021 — described as two of the hardest years of his life; emotionally depleted, dragging himself to work, losing resilience
As an introvert, struggled to build peer networks and industry relationships; remained isolated for years when connection would have helped him most
Promoted four employees into leadership roles that did not work out, requiring demotion each time — identified his own weakness in selecting and supporting people for leadership positions
Slow to fire: held on to underperforming or toxic employees too long, often driven by fear of operational disruption rather than conflict avoidance per se

Notable quotes

I feel like I just walked in off the street in flip flops eating a candy bar and said yeah I'll buy that.

I bought a business in an industry that I didn't know with people that I never met which was also one of the lessons — I would never buy a business again without meeting the employees.

For several months in, it dawned on me — it's like I'm just the monkey signing the checks. I say something and then I leave the room and it changes, and it very blatantly changes.

You've taken everything that you have, your entire life savings, you've sold or leveraged everything you have and you've put it all on black and said I'm gonna let it ride. The fear of that — had I been in a stronger financial position I could have just said hey I'm willing to go down to two million for a couple years to get this figured out, but I just felt like I was trapped.

Last year was fantastic for us — we sold just under six million, SDE was about 1.4 million. I bought two new trucks cash because we needed two new trucks, so now we're positioned for more growth.