Brett Kennedy·July 25, 2024

Reflections on 2 Years in the Knife Fight | Brett Kennedy Interview

Brett Kennedy, a former financial advisor at Personal Capital (which sold to Empower at $35B AUM), acquired Furniture Taxi — a residential moving company in Atlanta — in March 2022 for approximately $520k (roughly 2x SDE of $225-250k on ~$750k revenue). He structured the deal as a stock transaction treated as an asset sale under Section 338(h)(10) to preserve DOT/Motor Carrier licenses, insurance standing, and corporate credit history, while benefiting from accelerated depreciation that generated ~$30-40k in first-year personal tax savings. The first two years were intensely difficult: labor instability (workers no-showing or arriving unfit), an undisclosed owner-dependency from the seller's partner, loss of proprietary CRM software and associated lead flow at closing, and the emotional weight of working in the business drove Brett to drive trucks himself in the early months. He eventually hired an operations manager as a buffer, built a continuous hiring pipeline, and instilled a quality-first culture — growing revenue to $1.1m in 2023 and tracking toward $1.4m in 2024, roughly doubling the business during a 15-year low for residential real estate transaction volume. At the time of the episode Brett had an LOI on a second, larger transportation business (~$1.8m purchase price, ~$650k SDE) with a potential no-money-down structure, viewing Acquisition 1 as both a painful but valuable proof-of-concept and a credential that improved his access to better lending terms.

Deal facts

purchase price: ~$520k
multiple: ~2x SDE
sde ebitda: SDE $225k-$250k
revenue: ~$750k at acquisition; $1.1m in 2023; on pace for $1.4m in 2024
financing structure: SBA 7(a) loan (prime + 2.25%, ~6.5% at close) + ~5% seller note + ~10-15% equity down; stock transaction treated as asset sale (Section 338(h)(10))
notes: Acquired March 2022. ~$200k in depreciable assets (trucks, equipment). Section 179 accelerated depreciation generated ~$100k loss in year 1, saving approximately $30-40k in personal taxes. Business retained existing entity for DOT/Motor Carrier numbers and corporate credit history.

Why this business

Brett was drawn to stable, blue-collar businesses selling at 2-3x earnings after discovering the ETA world through BizBuySell. Furniture Taxi appealed because moving is an always-needed service, it was priced at 2x earnings, had a strong recognizable brand (yellow/black taxi theme), an established Google footprint in Atlanta after 10-12 years, a returning customer base, and existing contracts with apartment complexes. He saw untapped growth potential since the previous owner was content and not actively marketing.

What's working

Revenue nearly doubled from ~$750k at acquisition to $1.1m in 2023 and on pace for $1.4m in 2024, growing ~100% while the residential real estate transaction market hit 15-year lows
Hiring an operations manager created a buffer between Brett and the field crews, freeing his mind for growth and sales rather than daily firefighting
Instilling a culture of quality and five-star customer service, rewarding employees for great reviews and creating compensation structures aligned with business goals
Building a continuous hiring pipeline so there is always a bench of candidates to draw from when demand spikes or employees no-show
Retained entity structure (Section 338(h)(10)) preserved DOT/Motor Carrier numbers, insurance standing, and corporate credit history, enabling future truck financing
Accelerated depreciation from asset-heavy business produced significant personal tax savings in years one and two
Strong brand identity ('Furniture Taxi' with yellow/black taxi branding) stands out in a commoditized market
Recovered and grew relationships with commercial/apartment complex contracts that were at risk under the prior owner

What's hard

Labor instability was the single biggest challenge: movers frequently no-showed or arrived unfit to work, forcing Brett to drive trucks himself in the early months
Business was far more owner-dependent than disclosed during diligence — the seller's girlfriend/wife was deeply involved in operations in ways that were understated
The seller's family owned the proprietary CRM/lead-generation software the business relied on; Brett had to switch systems and lost associated lead flow after the sale
Unpaid vendor accounts from prior ownership surfaced during efforts to establish new vendor relationships
Bought too small for his portfolio-building goals: a $225-250k SDE business required intense personal involvement and slowed his timeline to acquire additional businesses
Rising insurance costs, fuel costs, truck costs, and labor costs compressed margins while growing revenue
Real estate transaction volume hitting 15-year lows reduced overall market demand for residential moving services
Emotional and psychological toll of the transition — sleep deprivation, daily uncertainty, working in the business rather than on it — was more severe than anticipated
Previous owner barely communicated after closing, leaving Brett without support during the most challenging transition period

Notable quotes

I have also gained so many other lessons that I believe will contribute to continue building this portfolio for my family.

You'll heavily overestimate what you can do in one year and underestimate what you can do in five.

People care when you care. When I'm in there meeting with the guys and I'm still very active and just constantly talking about doing a great job for people, rewarding employees for getting those type of things and creating a compensation structure that rewards them for the goals that you have as a business owner — that can create that culture.

If you're going into business — buying or in any type of business — and you don't think you're in a dual sales role, you're selling in and out. You're selling to the people that are going there to work for you and you're selling to the people that are going to be your customer as well.