Building a $10m Platform from 2 Low-SDE Businesses | Scott Walton Interview

$150,000 in SDE. Would you even look twice at such a business? Scott Walton and his partner did, and they bought it. And another at around the same time that was doing $250k in SDE. So the combined SDE of both acquisitions is below the threshold that many searchers would consider. And yet... Scott doubled the businesses in 2023 and is gunning to double them again this year, which would mean $10m in revenue and well over $1m of profit going into 2025. And much more of that profit will go directly to Scott as owner versus servicing debt had they bought a $1m SDE business right out of the gate. One of the benefits of buying small is that you pay far less for the initial acquisition, meaning far less debt service, meaning if you can grow into the desired $1m of profit and beyond, you keep a lot more of that profit a lot sooner. Today's interview with Scott is how you might do just that. Please enjoy Scott Walton, co-owner of Matrix Mechanical.

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00:00:00. Scott’s background in tech
00:05:35. Scott and his partner start searching
00:11:22. Why they were comfortable buying small
00:16:19. Acquisition one: heating services business
00:18:35. Terms of the first deal
00:23:18. How Scott defines a good deal
00:33:20. Acquisition two: the plumbing company
00:35:44. Lessons on working capital
00:40:23. Having a fractional CFO
00:44:48. How they solved their recruiting problem
00:49:51. Training employees for customer service
00:57:08. Growing and goal setting
01:06:15. The risks of buying small
01:12:19. Installing a president to run the business
01:20:47. Insights on deal making and structuring LOIs

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ABOUT Acquiring Minds
Acquiring Minds is a podcast about buying businesses. Acquiring an existing business is an awesome opportunity for many entrepreneurs, and host Will Smith talks to the people who do it. New episodes 2x per week.

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