Acquiring Minds — "Buying a Business & Having a Blast"

Host: Will Smith
Guest: John (@fundofone)
Date: January 18, 2022

Episode Overview

This episode features John, a recent acquirer of a residential appliance repair business in South Carolina. John shares his journey from considering entrepreneurship to the challenges and triumphs of acquiring and now running a small business in a tight local market. The discussion provides an inside look at his decision-making process, due diligence, deal structuring, and first-hand experiences as a new owner-operator. The tone is candid, humble, and practical, offering both inspiration and grounded advice for aspiring acquisition entrepreneurs.

Key Discussion Points & Insights

1. John’s Backstory and Path to Entrepreneurship

• [01:54] John grew up in South Carolina, became a civil engineer, then moved to Virginia for career reasons.
• Inspired by Twitter’s Mills Snell to consider business acquisition instead of starting from scratch.
  • “I was starting from scratch and did slowly learn more about that. And as I did, it just became more and more clear that this is what I wanted to do.” — John [01:54]
• Constraints: Needed a stable income, had a family to support, and prioritized geography (move back to SC).

2. Highly Geographically-Constrained Search

• [04:54] Searched within a 30-35 minute radius.
  • Result: Severely limited business opportunity pool, looked at about 15 businesses.
• Criteria:
  • Minimum owner’s earnings: $250k (to replace salary and pay loan)
  • Max purchase price: $1.8M (based on SBA loan limits)
  • Avoided: Restaurants, healthcare, retail, and online-only businesses. Preferred home services.
  • “There weren’t enough businesses that go on the market in this tiny little geography…I was really, really fortunate to find this one that checked all the boxes and turned out to be a really great company.” — John [06:31]

3. The Actual Acquisition Process

• Serious consideration of 8 businesses, only 2 made it to LOI stage. Got beat by a local competitor on one.
• Prepared for proprietary outreach and networking if public listings dried up.
• Had plan to move regardless — willing to adapt if deal didn’t materialize.

4. What Made the Appliance Repair Business Attractive?

• Steady business: 75–80% of revenue from warranty/manufacturer contracts (recurring and predictable).
• Team: 7 technicians, 3 office staff — large enough for stability but small enough to manage.
• Industry appeal: Recession-resistant, with increased demand as people spent more time at home post-COVID.
• “If it’s a downturn, it’s probably going to be a lot more reasonable to repair your appliances than replace them…so I felt like a downturn might actually be good for us.” — John [13:03]
• Seller’s culture emphasized support and “family”—a key factor in John’s comfort and decision.

5. Size of Business: Introspection and Philosophy

• Debated larger deals with outside investors but preferred autonomy ("fund of one" mentality).
  • “Frankly, we’ve all got a little bit of the imposter syndrome going on, I think. And so just how far can we be an imposter and live with it? So I think this is pretty close to my limit.” — John [17:52]
• Saw advantages in a business small enough to manage, large enough not to be personality-dependent.

6. Deal Structure & Numbers

• Reported seller's earnings: $240k (after adjustments).
• Purchase price: $775k
  • John: 15% down
  • Seller financing: 5%
  • SBA-backed loan: 80%
• “So squarely within what I think is relatively normal but probably a little bit rich for a company this size. But…it just checked so many other boxes for me…” — John [23:54]
• Sellers were in no rush, comfortable holding for a higher price, contributing to their negotiation leverage.

7. First Month as Owner: Culture, Challenges & Opportunities

• Existing team is strong and “family”-like; concern is not to “screw things up.”
• The business is mature enough to function without direct daily oversight, freeing John to focus on improvements and strategic growth.
  • “Most of my time…will just be about improving the company in various ways. So it’s not dependent on me really for sales…or repairing any appliances…” — John [28:59]

8. Opportunities for Growth

• Initial focus is on internal improvements and establishing clear company vision/mission.
• Recognizes opportunity to grow direct-to-customer ("cash calls") and increase marketing visibility (Google My Business, Facebook, etc.)
  • “I think that to be an exceptional employer, you need to be providing opportunities for everybody that wants to grow in their career to do that. And so for us, that’s going to mean we need to have a lot more customers.” — John [33:13]

9. The Realities of Transition: Frustrations & Insights

• Practical difficulties: Account transitions, vendor responsiveness, telecommunications headaches.

  • “I’m trying to pay people and they won’t take my money…and pretty much every single account transition has gone—it seems like this shouldn’t be this hard…” — John [35:05]

• Takes lessons from these frustrations to ensure his own customers have a better experience.

• Memorable moment:

  • “Things that are worthwhile are difficult and hard and that’s what I’m getting to do every day. So it’s just an incredible privilege and just really fun to do…some days I have to remind myself it’s fun. But frankly…it really is energizing.” — John [38:18]

10. Building Trust & Team Camaraderie

• Undertook ride-alongs with technicians to build rapport, gain insight, and affirm his support for the team.
  • “I’m just asking questions, trying not to slow the guys down too bad. And what I want to come from that is a genuine sense that I do really and truly care about more than how much revenue can you bring in every day.” — John [40:46]
• Recognizes ongoing work needed to maintain and strengthen these bonds.
• Initiated Monday morning meetings for regular touch-points.

11. Advice and Openness for Others

• John is active on Twitter (@fundofone), open to DMs and sharing his experience.
  • “I am eager to provide that back to the extent that I can as transparently as I can… I’m as open of a book as I can be and happy to connect with anybody that wants to connect.” — John [44:21]

Notable Quotes

• On the value of buying over building:
  “I went round and round and round, spent many a night on the laptop researching…I was just never anywhere close to confident enough. Never thought of any sort of idea that could produce revenue quickly enough…” — John [04:03]
• On industry selection:
  “Home services businesses fit the bill…So I looked at anything and everything that met that criteria…” — John [06:18]
• On deal terms and flexibility:
  “You set the price, I’ll set the terms…Sent a paragraph and a half of seller forgiveness clauses…” — John [21:00]
• On being a new owner:
  “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…” — John [15:01]
• On struggle and fulfillment:
  “Nothing that is easy is all that worthwhile. Things that are worthwhile are difficult and hard and that’s what I’m getting to do every day.” — John [38:18]

Timestamps for Important Segments

• John’s Background and Initial Interest – [01:54]
• Geographically-Constrained Search – [04:54]
• Deal Analysis and Criteria – [06:18]
• Acquisition Process Experiences – [08:11]
• Attraction to Appliance Repair & Due Diligence – [11:33]
• Team & Company Culture – [15:01]
• Reflections on Business Size and Investors – [17:52]
• Deal Structure and Numbers – [20:44]
• Seller Motivation and Negotiation Dynamics – [26:34]
• Operating Culture and Owner’s Role – [28:59]
• Growth Plans & Vision – [31:41]
• Transition Challenges (“Nothing works as it should”) – [35:05]
• Building Trust, Ride-alongs & Culture – [40:46]
• How to Connect with John – [44:21]

Final Thoughts

John’s story is an honest, practical, and encouraging account for those considering personal or family-focused business acquisition. His transparency about challenges, thoughtful decision-making, and emphasis on culture and team-building make this episode a standout for listeners interested in acquisition entrepreneurship.

Find John on Twitter: @fundofone