Dominick Blue·July 11, 2024

Buying & Growing a Business While Keeping a Day Job | Dominick Blue Interview

Dominick Blue is a former 11-year Marine Corps officer who transitioned into tech, briefly ran an MVP consulting firm and a tech startup, then discovered ETA and launched his holding company Noer Group. In January 2024, he acquired a San Diego air duct cleaning company for $1.6m total project cost (~2.5x SDE) using an SBA 7(a) loan with 10% down through Live Oak Bank, while simultaneously having a newborn. The business had $2m in revenue, ~$445k SDE, a strong existing management team, and a nearly absentee prior owner. Dominick's explicit thesis from day one was to use the air duct platform as a toehold into HVAC — and within four months he executed a second SBA acquisition of an Orange County HVAC company ($600k, ~$270k SDE) to become a full-suite HVAC and air duct contracting operation across two Southern California markets. Post-close challenges included a failed operator placement (a veteran who found the volume of decisions overwhelming and returned to active duty), replacement of 40% of the fleet due to undiscovered mechanical failures, elimination of ethically questionable prior sales practices, and the financial tightrope of running on thin SDE while making large early capital bets — all while maintaining a W2 job and caring for a newborn. Dominick is candid that the W2 income was essential to absorb these early shocks and explicitly advises others against trying to replicate this approach unless circumstances similarly require it.

Deal facts

purchase price: $1.6m (total project cost, air duct co.); $600k (total project cost, HVAC co.)
multiple: 2.5x SDE (air duct co.); implied ~2.2x SDE (HVAC co.)
sde ebitda: SDE ~$445k (air duct co.); SDE ~$270k (HVAC co.)
revenue: $2m (air duct co., 2023); ~$850k (HVAC co.)
financing structure: SBA 7(a) loan, 10% down (both deals); funded through Live Oak Bank for deal 1
notes: Air duct co. founded 2016, 20 FT employees, San Diego. HVAC co. founded 1993, 4-person team, Orange County. Dominick retained W2 employment and took no salary from either business. Almost lost deal 1 due to seller tax filing paperwork issue with original bank, which ghosted him; switched to Live Oak and closed in 4 weeks.

Why this business

Dominick targeted Home Services businesses in Southern California with $300-650k SDE because he wanted stable, cash-flowing assets rather than high-multiple tech deals. He chose the air duct cleaning company specifically because it had a strong management layer — a GM, warehouse manager, and office manager — that allowed the previous owner (who traveled 7-9 months per year) to be largely absent. He saw it as a toehold into HVAC: his intention from the moment the offer was accepted was to back into a full HVAC contracting company, eventually expanding into mechanical contracting (HVAC, plumbing, electrical, fire protection).

What's working

Strong existing management team (GM, warehouse manager, office manager) that ran the business with minimal owner involvement before acquisition
Cash-on-delivery revenue model eliminates accounts receivable and provides fast cash collection
60%+ gross margins on air duct cleaning business
Successfully executed planned HVAC tuck-in acquisition (Orange County company, $600k, 4 months after closing deal 1), pivoting the platform into a full-suite HVAC contracting company
Repositioning brand as an HVAC company that also does air duct cleaning, which carries more credibility with consumers and commercial customers
Pursuing B2B and commercial/industrial customers where demand is regulation-driven, avoiding the difficult cold-call demand-generation problem of pure residential air duct sales
April represented the highest revenue month in the company's ownership period after initial adjustment; team largely embraced rapid change
Retaining W2 income eliminated personal salary pressure and provided financial cushion to make large early bets (fleet replacement, operator hiring)

What's hard

Hired a military-veteran operator to run day-to-day operations with a 40% vesting equity stake; operator struggled with the volume and dynamic nature of small business decisions and ultimately returned to active military service after 6-8 weeks, requiring Dominick to step back in as de facto CEO
Revenue declined during the operator transition period
Discovered post-close that some sales practices under previous owner were ethically questionable (upselling unnecessary services); Dominick eliminated these practices, accepting lower revenue to maintain integrity
Replaced 40% of the vehicle fleet within the first three months due to transmission failures and mechanical issues — a diligence miss (did not inspect maintenance records or test-drive vehicles despite Dominick's background as a military diesel mechanic)
Did not conduct a QofE (quality of earnings) review, which would have better managed revenue expectations post-close
Air duct cleaning is a discretionary, want-based service that is hard to demand-generate via cold outreach; greater than 90% of conversion problems stem from cold/outbound calls
Balancing a newborn baby (born February 3, two weeks post-close), a recovering wife, a struggling operator, and a financially tight business simultaneously — Dominick described a literal floor moment
Thesis of placing an inexperienced operator with sweat equity (40% over 10 years) proved premature; paused pending further portfolio scale and revised approach

Notable quotes

I don't come from a pedigree of investment banking or Wall Street or working at PE backed companies, so I felt that I needed to go earn those credentials on the streets of Hard Knock, if you will, so that when I do go present myself to investors I can come from a place of credibility and off of a built reputation of having done it myself.

It doesn't count until it's on paper. Until the deal is funded, it doesn't count.

I very affectionately tell the team that I do not take a title in the company, but you're right — I am the CEO. I'm setting strategic direction.

I remember her saying something to the effect of, listen, you got to do whatever it takes, but the business can't fail. And she was like, take care of the business.