Kristiana Laugen·October 21, 2024

Small SDE, Big Upside: Buying a Business with 5 Employees | Kristiana Laugen Interview

Kristiana Laugen is a tech-and-startup veteran who spent years at home services platforms HomeBell (a German startup, US launch that failed) and Handy/Angie (performance marketing and P&L management) before leaving corporate life to search for a small business to buy. After a search of only about two months, she acquired a 40-year-old commercial pool maintenance and repair business in the Los Angeles area for approximately $920k (~3x SDE on ~$300k SDE, $675k revenue) using 10% equity down and an SBA loan, with the seller retaining 5% equity to maintain his contractor license — a structure enabled by the 2023 SBA rule change allowing partial buyouts. The business serves primarily commercial accounts (HOAs, condos) cleaned 3x per week, generating roughly 50% recurring cleaning revenue and 50% repair revenue; strong margins and the longevity of a 40-year track record gave Kristiana confidence despite the small size and inherent fragility. Just 90 days in at the time of the interview, she had already turned over all but one of the four inherited technicians, introduced a pool route management app, and begun building a hiring funnel and online presence — moving faster than advisors suggested but deliberately front-loading the pain. Her long-term vision is open-ended growth (potentially including a roll-up) with a focus on autonomy and income exceeding her prior corporate salary, and she is forgoing her own salary for at least a year to reinvest in the business.

Deal facts

purchase price: ~$920k
multiple: ~3x SDE
sde ebitda: SDE ~$300k
revenue: $675k
financing structure: 10% buyer equity (SBA down payment) + 85% SBA loan + 5% seller equity retained (partial buyout via 2023 SBA rule change)
notes: Seller (Robert) was a sole proprietor; created an LLC and assigned assets as condition of sale to facilitate equity sale. Seller retained 5% equity and contractor license. Effectively a stock/equity sale rather than asset sale due to licensing requirements. Business is 40+ years old, 4 technicians at time of purchase. Guest not taking a salary for at least one year post-acquisition.

Why this business

Kristiana had direct background in home services from two startup roles (HomeBell and Handy/Angie) and wanted a home services business where she could clearly articulate specific value-add levers. She was attracted to pool maintenance specifically for its recurring commercial revenue, the longevity and stability of the 40-year-old business, strong rapport with the seller, and the macro thesis that pool cleaning is unlikely to be disrupted by technology in the near term. Geographic constraints around Los Angeles and desire to retain ~70% ownership further shaped the search.

What's working

Strong seller rapport and ongoing support — seller has been emotionally supportive and non-territorial despite 40 years of ownership
Commercial-heavy customer base (HOAs, condos) generates much higher cleaning frequency (3x/week vs. residential 1x/week) and more frequent repair revenue
Recurring revenue (~50% of total) provides a stable base; repair work, while not contracted, materializes consistently once a critical mass of commercial accounts is reached
Higher margins enabled by commercial focus allow more competitive technician pay rates, making hiring easier relative to residential pool businesses
Partial buyout structure (2023 SBA rule change) preserved seller's contractor license while enabling the acquisition to proceed despite Kristiana not holding a pool contracting license
Technology introduction (pool route management app) improving operational efficiency and pool-by-pool profitability tracking
Building a true hiring funnel where none previously existed

What's hard

Very small SDE (~$300k) means high fragility — losing one crew member equals ~25% of SDE at risk
Turned over all but one of the original four technicians within 90 days, creating operational disruption and stress
Guest moved too fast with changes (her own assessment) — making many changes in weeks 2 and 3 was the right moves but created unnecessary stress during transition
Repair technicians (specialized trade work) are much harder to hire than cleaning technicians
Guest is not taking a salary for at least one year, requiring personal financial runway
Business was entirely pen-and-paper, no online presence, no Google/Yelp reviews, 10-year-old website with zero traffic — all require investment to address
Licensing requirement (contractor license held by seller) forced a non-standard equity sale structure that some banks incorrectly told her was impossible

Notable quotes

I want to eat what I kill right like I want to be whatever I kill which maybe it's not going to be very good stuff but I hope it is that I want to kind of be master of my destiny have a bit more control of my life but then again really eat what I what I'm killing so if I'm doing fantastically well I want to be able to have that if I'm not you know that that's the flip side of it.

I started changing things all like week two I was like all right we're all using this app you know week three I'm starting to change Personnel immediately and trying to get different people in the funnel so I did really change a lot quite quickly which I think made some things much harder than I needed to make them for on myself the first 90 days but my logic was kind of like look I'm going to be deep in the J curve no matter what why not make it like why not get all the pain out of the way as soon as possible.

Do I think AI is coming for pool cleaning like no not really I don't think AI is coming for pool cleaning.

I really felt like I had the backing of the seller and the support of the seller in this business which over the past 40 years a lot of its success is you know probably a lot attributable to him and so I felt like all right I have the seller in my corner here he's still going to be involved in the business he's invested in me he genuinely really wants myself and the business to succeed.