Mike Loftis·April 25, 2022

Lessons from a Founder Who Then Started Acquiring

Mike Loftis is a 31-year-old founder-turned-acquirer who built a commercial landscaping business in Orange County, Southern California from scratch before discovering acquisition as a growth lever. After grinding three years to reach $1m in revenue organically, he made three acquisitions of commercial landscaping companies (each doing $500k-$800k in revenue) and combined them with continued organic growth to reach approximately $4m in total annual revenue generating $600-700k in EBITDA — working only 20-25 hours per week. All acquisitions were small cash/non-SBA deals; he sourced one creatively by posting a buyer listing on BizBuySell. His core thesis is commercial-only maintenance routes for recurring revenue and low-friction client relationships, with large construction upsell opportunities layered on top. Mike is candid that organic startup is punishing and he would recommend new entrants buy first, then bolt on; he advises buyers to lean on sellers as mentors during transition and prioritize payroll reliability to retain blue-collar crews. He is eyeing a larger SBA-backed acquisition to potentially double the business again.

Deal facts

multiple: 2.5x-3x SDE (stated as typical range)
sde ebitda: ~$150k SDE on first acquisition (seller stated); business now doing $600-700k EBITDA at ~$4m revenue
revenue: $4m total (at time of recording); individual acquisitions each $500k-$800k revenue
financing structure: Cash / non-SBA for all three acquisitions; seller financing implied on some; no SBA loan used
notes: Three acquisitions completed; each priced in a few hundred thousand dollars range; all-cash or non-SBA structures. First acquisition: ~$600k revenue, seller claimed ~$150k SDE. Second sourced via self-posted BizBuySell listing. Third was ~1 hour away, valued for strong asset base. Organic growth brought total to ~$4m. EBITDA at $4m is $600-700k. Owner works 20-25 hrs/week.

Why this business

Mike grew up liking plants and being outside; his father was in real estate development and pointed out that commercial landscapers do well and are always outdoors. After working two years at a major landscape company learning the nuts and bolts, he went out on his own. He chose acquisition as a growth strategy out of impatience and curiosity — he wanted to grow faster than organic grind allowed, and loved the thrill of evaluating businesses. He focused exclusively on commercial maintenance work for its recurring revenue and low-headache client base.

What's working

Commercial-only maintenance accounts provide stable, recurring monthly cash flow — clients treat it like a utility bill
Bolt-on acquisitions allowed rapid revenue scaling from $1m organic to ~$4m without proportional overhead increase
Retaining seller employees: roughly 6 of 8 original crew from first acquisition still work for him; similar retention on others
Retaining ~80% of accounts on first acquisition by sending a simple introduction letter and maintaining continuity
Upgrading operations with QuickBooks, email invoicing, gas cards, work phone texting — quick wins over analog predecessors
Paying employees reliably and on time builds deep loyalty among a workforce living paycheck to paycheck
Relationship-based upselling: maintenance clients become sources of large construction/renovation projects ($80k-$150k+)
Right-sizing staff to allow 20-25 hr/week owner involvement at $4m revenue, creating runway for next acquisition
Year-round operations in Southern California eliminate seasonal layoff/rehire churn

What's hard

Organic growth to $1m took three years of grueling work with no Saturdays off — he would not do it again and recommends buy-first
First acquisition was nerve-wracking wiring all his saved cash with nothing tangible to show for it
Third acquisition was an hour away from home base — mitigated by retaining on-site account manager with a $6/hr raise (golden handcuffs)
Workforce lives on knife's edge financially — missing or delaying payroll even one day can destroy trust and retention permanently
The ceiling around $1m revenue is real for landscape owner-operators who lack systems; organic scaling is difficult without office infrastructure
Buyers without operational experience face significant learning curve managing hourly blue-collar workforce
Small acquisitions ($500k-$800k revenue) are below SBA radar and require alternative financing, limiting deal size

Notable quotes

I wired the money and I just told myself I was like, you know, I will not mess this up for a lack of not trying and not going for it.

You're on the knife's edge — they have no savings, nothing. So when you tell the guy you look in the eye and you say, hey, you're getting your check on Friday, I don't care if you gotta pawn your car, you better get the money there.

Organic is very difficult, it's gonna test you, it's not sexy, it's not perfect, it's arduous. And I don't know that I would do it again. If I was going to go in a different industry or whatever, I would definitely buy first and then build.

You know, I want to be the guy that has 500 people. I want to do the Chen Mark deal — roll up, I guess.