John (Fund of One)·March 29, 2022

Buying a Business & Having a Blast

John (known on Twitter as Fund of One), a civil engineer from South Carolina who had been working in Virginia, bought a residential appliance repair business in South Carolina in October 2021 for $775k — roughly 3.2x the ~$240k SDE — financed with an SBA loan, a 5% seller note, and 15% equity. The business, run by a husband-and-wife team (husband working only ~20 hrs/week), generates 75-80% of revenue through contracts with warranty companies and appliance manufacturers, giving John reliable inbound work without needing to market aggressively. One month in at the time of recording, John found the transition logistically challenging — account transfers, telecom issues, and vendor onboarding were all harder than expected — but was energized by the strong employee culture the sellers had built over many years. His near-term focus was tightening operations, building trust with the team through individual ride-alongs, and developing a company vision for 2022; his growth thesis centered on increasing direct-pay ('cash') customers through improved Google and social presence to complement the steady contract base.

Deal facts

purchase price: $775k
multiple: ~3.2x SDE
sde ebitda: SDE ~$240k
financing structure: SBA loan (~80%) + 5% seller note + 15% buyer equity
notes: Listed at $799k; initial offer below $600k rejected; agreed at $775k. Working capital not included. Seller earnings originally reported as $265k but John revised to ~$240k after closer review. Sellers are a husband-and-wife team, husband worked ~20 hrs/week.

Why this business

75-80% of revenue comes from contracts with warranty companies and manufacturers, providing steady inbound work without needing to be a marketing genius. The business met his financial criteria, was a size he felt equipped to handle (7 technicians, 3 office staff), had recession-resistant characteristics (people repair rather than replace appliances in downturns), and had a strong employee culture built by the sellers over many years.

What's working

Contract-based revenue from warranty companies and manufacturers provides consistent inbound customer flow without active marketing
Strong pre-existing employee culture and team cohesion — technicians communicate constantly and have genuine community despite working independently in vans all day
Business was not owner-dependent: day-to-day operations run by existing staff, giving John time to work on the business rather than in it
Geographic constraint forced discipline; the one business he found checked all boxes and he has seen nothing comparable since
Ride-alongs with each technician building trust and learning the business ground-level

What's hard

Account and contract transitions to the new entity have been a logistical nightmare — telecom, vendor accounts, and other transitions not designed for asset sales
Phone system confusion: existing voicemail message was unclear to customers, causing some to call John's personal cell instead of reaching the office
Limited deal flow in the tightly constrained geography (30-35 minute radius in South Carolina) meant very few businesses ever hit the market
Imposter syndrome entering a company with an established culture; feels the weight of not wanting to disrupt what the sellers built
Building and maintaining personal connections with technicians who are independent by nature and spend their days alone in vans

Notable quotes

it is truly the opposite of a turnaround it is a please don't screw this up kind of case which is humbling just to be aware that this is something that i've kind of inherited more or less

you set the price i'll set the terms because you know i'm on twitter i read stuff so that's how this game works right

i did not want to give up this really great opportunity over a couple of thousand dollars a year in the end is what it would have amounted to

some days at the end of the day i do have to remind myself this is fun i have to and that's one of the reasons why i have really enjoyed writing those daily reports because i will sit down and think i did like one thing today this was just a junk you know throwaway trash day and then i'll think about what happened and start writing and writing and writing and realize well i actually moved quite a few balls forward