Tom McCormick·June 18, 2026

From Software to Concrete Cutting (and $1.4m of SDE) | Tom McCormick Interview

Tom McCormick spent 30 years in software and consulting — Accenture, IBM, and ultimately a private equity-backed software roll-up where he served as general manager before a successful exit. At 52, frustrated by the lack of senior software roles and unwilling to return to a constrained corporate hierarchy, he discovered ETA through friends and used exit proceeds plus ROBS (rolling $400k from his 401k) to buy a concrete cutting and coring business in the Twin Cities for $6 million. The business had 25 employees, $6m in revenue, and SDE of $1.3–1.4m — larger and more expensive than Tom originally targeted, but remarkable in its earnings margin, revenue diversity (400–500 customers, no single one over 5%), and 25-year reputation with no active sales effort. The deal was off-market, surfaced by a former banker turned broker, and Tom won over passive competing investors by building genuine rapport with the family sellers around shared small-town and outdoors values. Structurally, the deal closed at roughly 4x SDE using SBA financing plus ROBS, with a consulting agreement in lieu of a seller note to reach the sellers' $6m target; Tom acknowledges paying 100% for accounts receivable as a first-time-buyer mistake. A year and a half in, the business is performing as expected, Tom is paying himself ~$300k all-in, and he is carefully staging back-office modernization while leaving field operations untouched — with an eye toward potential tuck-in acquisitions and a lifestyle wind-down within five to ten years.

Deal facts

purchase price: $6m
multiple: ~4x SDE (inclusive of accounts receivable)
sde ebitda: SDE $1.3m–$1.4m
revenue: $6m
financing structure: SBA loan (up to $5m limit) + ROBS ($400k from 401k) + ~$200k personal equity; C-Corp owned 70% by ROBS 401k / 30% by buyer and spouse; consulting agreement in lieu of seller note to bridge to $6m price
notes: Buyer paid 100% of accounts receivable (~$950k) as part of $6m price — acknowledged as a rookie mistake. No seller note; consulting agreement used instead. 25-employee business in Twin Cities. Seller asked $7–8m; agreed at $6m. Deal was off-market, brought by a former banker turned broker.

Why this business

Tom wanted the least sexy, most blue-collar, low-profile service business he could find — something that cranks in the background, that people have been doing forever and will keep doing. Coming from software and IT, he deliberately sought maximum distance from tech or AI disruption. The concrete cutting business fit that profile, had 25 years of reputation in the Twin Cities, extremely diversified revenue (no customer over 5%), a 20%+ EBITDA margin, and a management layer that would allow him to work on rather than in the business.

What's working

Business has 25 years of established reputation in the Twin Cities with only three competitors of comparable size capable of handling large complex projects
Highly diversified revenue: ~2,000 invoices per year across 400–500 customers, no single customer exceeding 5% of revenue
Strong historical financials: seven years of P&Ls showed steady $6m revenue and $1.2–$1.4m SDE with no active sales effort — just answering the phone
Tom's prior sales background positions him to pursue active sales and market-share gains that the previous owners never attempted
Seller relationship remained collaborative post-close, enabling over a year of financial true-ups and settlements without conflict
Management layer was already in place; journeymen average 20 years of experience, allowing Tom to work on not in the business from day one
Tom's relatability with the blue-collar sellers and workforce (shared small-town, outdoors background) helped him win the deal over competing passive investors

What's hard

No contracts: roughly four to five signed contracts per year out of 2,000 invoices; the rest is time-and-materials with no backlog beyond two weeks — a psychological challenge for a contract-trained IBM veteran
Severe working capital stress: labor and materials paid upfront; customers routinely push payment to 60–75 days, creating a summer cash-flow crunch that cost Tom significantly in year one
Accounts receivable rookie mistake: Tom paid 100% of AR at closing (~$950k) and structured purchase price rather than a multiple-plus-AR; estimates he left $75–100k on the table
No seller note — one of three banks walked away; consulting agreement workaround added complexity
Scheduling is manual and chaotic — a physical calendar book covered in whiteout, changing 10 times a day; digitization is desired but must be introduced slowly to avoid alienating field workers who are not tech-comfortable
ROBS structure required forming a C-Corp and introduced double-taxation risk, complexity, and total capital commitment beyond original comfort zone
Post-close financial settlements with seller continued for over a year (property tax refunds, shared expenses, etc.) in ways Tom did not anticipate

Notable quotes

I told everybody I'm looking for the least sexiest business I can find. I wanted it to be blue collar service kind of work and I wanted it to be very low profile, just something that cranks in the background that people have been doing forever and they're going to keep doing.

From my IT background, I wanted to stay as far away from AI or any technological advancements as I could.

This was really my kind of burn the ships moment — like if we go forward with this, this has got to work.

I've never cut concrete. I put it this way. I own three skid steers. I've never driven one of them.