Philip Blackett·January 11, 2024

Shutting Down After a 4 Year Struggle | Philip Blackett Interview

Philip Blackett bought Cemetery Services, a Boston-area contractor that managed burials, landscaping, and records for 20+ cemeteries, in September 2019 after a search-fund-style search (through the Search Fund Accelerator) and an unusual six-month stint working inside the business as 'business manager' to de-risk the acquisition before buying with an SBA loan, a seller note, and his own equity. Six months after closing, COVID hit: several pipeline prospects chose to keep maintenance in-house once their own burial volume spiked, stranding equipment and staff Philip had already invested in, while his existing flat-fee contracts had no volume caps, so tripled burial and mowing volume during COVID crushed margins instead of boosting them. Over the next three years he took on high-interest merchant cash advances, went off payroll himself repeatedly, worked a second job at Chick-fil-A for nearly a year, and did manual labor himself to keep the business alive amid rising costs, employee poaching from a better-funded competitor, and a personally-guaranteed SBA loan. The business finally shut down on September 30, 2023, after losing a key trial customer, and Philip now works as a business coach while remaining open to buying another business in the future.

Deal facts

revenue: low seven figures
financing structure: SBA loan (~70-80%) plus seller financing note (~10%) plus buyer equity (~10%); later supplemented during the downturn with merchant cash advances and working capital loans from non-traditional/high-interest lenders
notes: Business was ~10-12 years old at acquisition with 20+ cemeteries under management, ~20-25 employees, margins roughly 20-40%. Closed September 2019, just months before COVID. SBA loan was personally guaranteed.

Why this business

Philip was searching for a business to buy through the Search Fund Accelerator (SFA) in Boston, but he and his wife had just had twin daughters and decided to limit the search to businesses within 30-45 minutes of their home in the Boston area so his wife could keep her stable job. That constraint led him to Cemetery Services, a company managing and maintaining 20+ cemeteries in New England (burials, landscaping, records management) under contract rather than owning the cemeteries themselves. SFA's investors felt the business was too small and passed, and Philip's search runway ran out. Years later, after a gas explosion prompted him to reconnect with the owner (a friend), the owner invited him to join as business manager, which let Philip de-risk the eventual acquisition by working inside the business for about six months before buying it in September 2019.

What's working

Working inside the business as 'business manager' for six months before buying gave him deep visibility into financials, customers, and operations — essentially extended due diligence with no obligation to close
The business model (outsourced cemetery maintenance/burials/records/landscaping under contract) was recurring, essential, and sticky for customers because they'd otherwise have to rebuild in-house labor and expensive equipment (excavators, trucks, mowers)
Deep personal trust and relationship with the seller, built over years, which both enabled the deal and sustained Philip through the crisis ('even if the wheels fall off on this deal we'll still be friends')
Strong pre-COVID pipeline of new cemetery clients that had the business on track to double revenue in its first 12 months
Support system of his wife and the former owner, plus his faith, which he credits with keeping him going through three brutal years

What's hard

COVID hit six months after closing: several prospective new clients whose burial volume spiked decided to keep maintenance in-house rather than outsource, killing the pipeline Philip had already invested in (trucks, excavators, staff) ahead of time
Existing customers were locked into flat monthly all-inclusive fees with no cap, so when burial volume tripled and grass had to be cut weekly instead of biweekly during COVID, costs (labor, gas, equipment repair) spiked while revenue stayed flat, turning profitable accounts unprofitable
Had to take on high-interest merchant cash advances and working capital loans to make payroll starting October 2020, just to survive the first year
Took himself off payroll multiple times, worked a second job at Chick-fil-A for nearly a year (7am-11pm days) to personally cover cash shortfalls, and did manual labor himself (cutting grass, digging graves, cleaning up biohazard material) when staff quit
A better-funded competitor emerged and poached employees with higher wages, creating a wage war Philip couldn't match
Lost a major customer in August 2023 after a one-year trial contract wasn't renewed, triggering the final cash crisis and the decision to shut down; the business closed September 30, 2023
In hindsight, should have required proof/signed contracts before making equipment and staffing investments, and should have negotiated volume caps/overage fees into all-inclusive contracts from the start

Notable quotes

I have faith in God but not faith in people in what they say. I need to be very conservative and show me the money first before I make that investment.

It's about as close as risk-free as you can get because I think at that same time it's like extended due diligence.

I had to get a second job. I had to work at this business during the day and then leave four or five hours into it to travel across town to manage a Chick-fil-A and close that night... I remember actually when I was in the Drive-Thru line one time working as a manager Chick-fil-A and I got a call from one of my team members saying, Phillip, I don't know how else to tell you this but one of your dump trucks blew up.

There were definitely nights where I quite honestly cried myself to sleep, ask God why. Mornings where I was behind the steering wheel in the car and just saying, is this worth it.