Fred McGill·December 12, 2024

How and Why to Buy an Electrical Business | Fred McGill Interview

Fred McGill is an Atlanta-based entrepreneur who co-founded Simple Showing, a tech-enabled real estate brokerage, before pivoting to ETA after the startup grind yielded a modest lifestyle business rather than a large exit. In February 2024 he acquired Bray Electrical, a 19-year-old residential-focused electrical contractor in the Decatur/East Atlanta area, for $1.3 million (down from a $1.5 million listing price) with a 10% SBA down payment and a seller note covering 15-20% of the purchase price with payments deferred 24 months. The deal was structured using new SBA partial-change-of-ownership rules that allowed the seller to retain 10% equity nominally — solving the state electrical license/qualifier problem without requiring Fred to immediately source a new qualifier, while giving him the right to buy out that equity for $1 after 18 months. The business was doing roughly $3.2 million in revenue and $380k SDE at acquisition; Fred grew it to a projected $4 million by year-end, driven primarily by rebranding (new trucks, logo, website) and a disciplined digital marketing buildout leveraging his startup experience — Google Ads, LSA, long-tail keyword campaigns, and Facebook retargeting. His core thesis for electrical was macro tailwinds: EV chargers, solar, smart panels, grid upgrades, and AI data-center electricity demand, all creating net-new revenue categories on top of traditional service and remodel work. Key challenges include the difficulty of hiring and vetting skilled electricians, the psychological sting of watching pre-acquisition AR pass to the seller post-close, and the ongoing time intensity of owner-operator life — Fred's goal is to reduce his involvement from 40 to 20 hours per week over time.

Deal facts

purchase price: $1.3m (listed at $1.5m)
sde ebitda: SDE $380k at acquisition
revenue: $3.2m at acquisition; ~$4m projected year-one close
financing structure: SBA loan (~80%), seller note (~15-20% of purchase price, payments deferred 24 months), seller retained 10% equity stake (buyable for $1 after 18 months); 10% buyer down payment ($130k)
notes: Seller retained 10% equity under new SBA partial-change-of-ownership rules primarily to maintain state electrical license/qualifier status. Seller also receives monthly license-holder stipend for 18 months. Business had been operating 19 years. Deal closed February 2024.

Why this business

Fred had grown weary of zero-to-one startup building after co-founding a tech-enabled real estate brokerage (Simple Showing). He wanted to buy something already profitable with an established brand and team. He chose electrical specifically for its regulatory tailwinds (EV chargers, solar, smart panels, grid upgrades, federal/state incentives), the 'smart home' wave creating net-new demand categories on top of traditional break-and-repair work, and a perception that HVAC was more crowded and carried higher multiples in his Atlanta market. He also saw that the target business had done little digital marketing despite decent organic growth, giving him a clear path to double revenue by applying skills from his prior startup.

What's working

Turning on digital marketing (Google Ads, LSA, Facebook retargeting, long-tail keyword campaigns) drove significant revenue growth — from ~$3.2m to a projected ~$4m in year one, roughly 25-30% growth
Rebranding: new logo, truck wraps, refreshed website, online booking, and aggressive Google review solicitation (38 reviews at acquisition, targeting 200 by year-end)
Inherited strong operational infrastructure: ServiceTitan already implemented by seller pre-sale, long-tenured office manager (7 years) and project manager (8 years) both still in place
Shifted hiring philosophy toward senior, highly experienced electricians — paying more per hour but getting higher output, fewer mistakes, and less oversight burden
Hands-on practical skills testing during hiring (live three-way switch wiring test, rephrasing questions from 'can you do X' to 'how many times have you done X') improved candidate quality
Revenue mix of ~80% residential / 20% commercial provides versatility; team has backgrounds across service, remodel, solar, and commercial work
SBA partial-change-of-ownership structure elegantly solved the license/qualifier problem without requiring Fred to find an independent qualifier upfront

What's hard

Hiring is the most persistent challenge — finding qualified electricians, vetting their actual skill level (not just claimed experience), and competing against large multi-trade companies paying straight commission
Psychological difficulty of AR transition at close: checks from pre-acquisition work kept coming in for 6-8 weeks post-close but all had to pass to the seller, which was demoralizing even though working capital was properly sized
Digital marketing is not a simple plug-and-play lever — requires deep hands-on fluency; campaigns must be tested, iterated, and actively managed; Fred cautions buyers who lack this knowledge to not assume it can easily be outsourced
Cultural transition as a white-collar buyer walking into a blue-collar workforce previously led by a woman with a very different personality; required humility and constant reassurance about continuity
License/qualifier dependency on seller for 18 months creates ongoing structural reliance, even though it is contractually managed
Managing the business is currently a 40-hour-a-week commitment; goal is to get to 20 hours a week

Notable quotes

Getting kicked in the balls every day — that's what it's like when you're doing a startup. It's just very challenging to find product-market fit, to create something from scratch, to hire, to do marketing, all those things.

Making the phone ring is literally like 70% of what you do in a home services business — hire good techs and make the phone ring. That's two-thirds of the equation.

I really think what keeps you up at night specifically in this space, if you're trying to grow the business, is making the phone ring. Can you make the phone ring, or can you implement or outsource a strategy that effectively and economically makes that happen on your behalf?

I started rephrasing my questions to 'how many panel swaps have you done?' If they tell me five or six — versus one of the more senior guys I hired who said '300 something' — you're not lying if you told me five or six, but I'm like, this guy's probably done one and had someone helping him.