🔑 40% of his team quit - Here's what he learned
Welcome to The Business Buying Academy with Sieva Kozinsky. Here's what we have in store for you today:
- How to buy and scale a small business to $200 million+
- Do this before buying a business
- What he learned from selling a business to Barnes & Noble
Imagine having to log into 50+ different bank portals every day.
That used to be the life of Nick, our Director of Finance.
Then we found Vesto. It pulls in every account-across every bank-into one dashboard. Real-time balances, cash flow, transactions. No more jumping between logins.
Now Nick handles it all in under 5 minutes. That means more time spent on cash strategy, less on admin.
(Thanks to Vesto for sponsoring this newsletter.)
Last week, some of our fellow investors and business buyers gathered on the Eastern Shore of Maryland.
Chesapeake Bay showed us her true beauty dressed in a Spring sunshine. And I can confirm that Maryland crab cakes are indeed, the BEST crab cakes.
While there were hundreds of valuable lessons learned, I want to share a few of my favorite takeaways from two of our speakers.
Of course, I have to leave out a lot of the intimate details that speakers shared, so make sure you're ready to register for the Enduring Ventures Duration Summit 2026 when we announce it in the coming months.
Chris Hoffmann on how to scale from $9m to $200m in home services
Chris bought his dad's HVAC business about 10 years ago and scaled it from $9 million in annual revenue to around $200 million.
How?
If I had to sum it up in a few words: An obsession with operations.
Chris had plenty of opportunities along the way to diversify into new service lines or acquire new kinds of businesses.He always declined those opportunities (until recently).
Put your head down and be the best at the thing you already do. There's always a new service line to expand into or a new business to buy, but most people do that too early. - Chris Hoffmann
Chris only expanded into a new business (roofing) and a new territory (Nashville) after completely nailing the playbook for running a world-class HVAC company in his home city of St Louis.
He now has a huge advantage acquiring HVAC companies in new markets. Owners of established businesses would rather sell to a fellow HVAC operator with an impressive track record over a private equity firm.
Focus is a superpower.
That might not be the lesson you'd expect to hear at an event run by a diversified holding company, but it's a powerful one that operators and investors need to understand.
By the way, Chris is launching is own newsletter. Check it out here.
Walker Deibel on how to embrace the chaos of buying SMBs
We were lucky enough to have Walker Deibel, author of Buy Then Build, as a speaker at this year's event.
His book is the Bible for SMB buying.
And the story he shared with us was Biblical:
Shortly after buying a manufacturing business, 40% of his employees quit on the spot and opened a competing business just a mile down the road.
He thought he was finished. He would default on his SBA loan and lose everything.
But he found a way out of the jam (I'll leave the specifics out of this newsletter; make sure you join us next year if you want to hear the juicy details of these stories).
The lesson: A lot will go wrong when you buy a sub-$5m business.
No amount of planning or strategy will help you avoid chaos in the small business acquisition world.
One of Walker's main points was that buying a small business shouldn't be thought of as an investing activity.
It's more of an entrepreneurial activity, and you're simply paying to skip the first few years of grinding from zero.
Buying businesses really only becomes an investing activity above $5 million in revenue because that's the point at which a company has enough resources to afford a real management team.
Thanks to all who joined us in Maryland this year. Hope to see you at next year's Duration Summit.
🔑 I talk a lot about the importance of getting a quality of earnings report if you're buying a business
Buying a business without getting a quality of earnings report is like buying a house without a home inspection. You’re taking a big bet without knowing what you’re buying, and it could be a disaster.
Even if the seller gives you all their financial statements, they often have very bad bookkeeping.
So, what should be in your QOE and financial due diligence package? Here's what today's sponsor Appletree says about their QOE reports:
✅ Proof of Cash
Are revenues real? We rebuild the last 1-2 years using bank statements to verify that reported earnings arrived in the bank account.
✅ Addbacks That Actually Make Sense
We normalize SDE or EBITDA with logic, not wishful thinking. The hand-waving. No “adjusting away” real costs just to make numbers look better.
✅ Working Capital Analysis
Avoid the “Post-Close Surprise” where you’re suddenly short $150k in working capital. We calculate what the business needs to operate smoothly.
✅ Forward Looking Projections
We model post close cash flow and debt service coverage under flat, growth, and decline scenarios – so you know how risky the deal really is.
If you’re sending out LOI’s or nearing a deal, don’t go in blind. Talk to Appletree for a pragmatic, thorough Quality of Earnings report – built by people who’ve bought businesses themselves.
🔑 Everything you ever needed to know about business
Gary Hoover knows more about American Business History than anyone else.
He collected tens of thousands of business books and studied them each closely.
He's is a walking encyclopedia when it comes to business. And he also lived some of that history, from starting a bookstore chain that got acquired by Barnes & Noble, to watching up close as Whole Foods and other iconic brands were created by his friends.
If you're a business nerd like me, this interview is one you have to listen to
Have a great day,
Sieva
P.S. - Are you hiring? Get started with top global talent from Somewhere (I'm a customer and investor)
Disclaimer: nothing here is investment advice. Please do your own research. The information above is just for information and learning.
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