Chase Murdock·July 10, 2023

5x in 5 Years Buying Small to Grow Quickly | Chase Murdock Interview

Chase Murdock and his partner Adam built Dakota Group, a self-funded holding company based in Salt Lake City, after spending 10–15 years in zero-to-one startup entrepreneurship. They started with Taylor Cooperative, a luxury custom clothier, which grew to hundreds of thousands in SDE and served as the proof-of-concept for their 'Playbook.' They then acquired four additional businesses — Workshop SLC (Fine Arts Studio), Built by Design (ADU-specialist general contractor), Northern Electric (electrical contractor), and Taft & Baird (clothier) — all in the $1–$5m revenue range, using a mix of bank debt, seller notes, and their own equity with no outside investors. Their core thesis is to buy intentionally small community businesses where they can apply a repeatable integration playbook (rebrand, digital marketing funnel, operator hire, product expansion) to achieve roughly 5x growth in five years, escaping what Chase calls the 'small business Death Zone.' The episode digs deeply into the difficulty of operator hiring and retention, the knife-fight reality of aggressive growth in tiny businesses, why trades recruiting is unexpectedly hard, and how Chase balances giving operators autonomy versus maintaining guard rails — all in service of a multi-decade strategy to be the premier steward of Main Street Salt Lake City businesses.

Deal facts

sde ebitda: hundreds of thousands per year (Taylor Cooperative, self-started)
revenue: $1m–$5m top line per acquisition (typical range stated)
financing structure: Bank debt on two acquisitions; own equity on two; seller note on one; no outside investors
notes: Portfolio of 5 businesses: Taylor Cooperative (started from scratch, luxury custom clothier); Workshop SLC (Fine Arts Studio, acquired 2021); Built by Design (general contractor/ADU specialist); Northern Electric (electrical contractor, ~27 years old); Taft & Baird (clothier/brand). Self-funded hold-co, no outside capital. 5x in 5 years growth target per acquisition. Two businesses grew 100%+ year-on-year in one year.

Why this business

Chase and his partner Adam wanted to escape the zero-to-one startup treadmill and build something long-lasting rather than sprint toward a quick exit. After starting Taylor Cooperative (a luxury custom clothier) and falling in love with small business, they pursued a multi-decade holding company strategy — buying small, community-rooted businesses in Salt Lake City where they could apply an operational playbook (rebrand, digital marketing, operator hiring, product line expansion) to grow each acquisition out of what Chase calls the 'small business Death Zone' (under $5m revenue). The mission is to steward exceptional community businesses and preserve local Main Street against large corporate consolidation.

What's working

Applying a repeatable 'car wash' integration playbook: full rebrand, technology implementation, website rewrite, and aggressive digital marketing investment from day one of ownership
Holding company shared services (marketing, finance, HR, legal) deployed across all portfolio companies, giving small businesses enterprise-level resources
Geographic focus on Salt Lake City is generating inbound deal flow and building a reputation as a trusted steward of local businesses
Long-term hold orientation (no intention to sell) is a genuine differentiator when competing for acquisitions against financial buyers
Cross-pollination of learnings across five businesses in different industries, surfacing common operational principles
Virtuous pricing cycle: charge a price premium, hire above-market talent, deliver quality service, justify premium — being implemented at Northern Electric
Taylor Cooperative growing 25-30% year-on-year organically; Workshop SLC achieved roughly 5x revenue in the first year of ownership
Building a chief-of-staff and portfolio operations practice to reduce dependence on Chase and Adam parachuting in

What's hard

Hiring and retaining great operators is the hardest part of the holding company model — one business cycled through two operators in 12 months, causing significant team disruption
Operating in the 'small business Death Zone' (under $5m revenue): one key person departure or wrong hire can threaten the whole business
Aggressive growth (20-50%+ per year, two businesses at 100%+ YoY) means constantly outgrowing processes, people, and systems — breaking things repeatedly
Electrician recruiting is extremely difficult; shrinking trade with fierce competition for talent in Utah
Digital marketing for trades is far more competitive than they anticipated — their advantage did not translate as cleanly as in their other businesses
Electrical and trades acquisition valuations are very high in the current market, creating a headwind for building out the trades platform
Balancing operator autonomy with sufficient oversight — too much rope led to one operator going in a problematic direction
Self-funded growth means personally guaranteeing millions in debt with no outside capital buffer

Notable quotes

Under 5 million you're one very big mistake away from closing the doors. It's just there is such little durability. You're one phone call away from a key person resigning to having to jump in and it sucks all the oxygen out of the room.

We are financing Dakota through blood, sweat and tears, not someone else's money or not our own capital. We're doing it through sweat equity.

Every small business owner I've met with has been remarkable at running their business. They have learned it over years or sometimes decades. They know how to fly that machine. If you know to use the analogy of an airplane, they know how to fly it blind. To have this presumption that you can come in and buy a small business and run it better, you should check yourself if that is your thinking.

We want to be the Iron Man suit around our operators at the Dakota level — through shared services, marketing, finance, HR — that's elective, they can purchase shared services from Dakota, and we can support them in that way.