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Everyone wants to buy a Tech company.

SaaS multiples at 5-8x. E-commerce brands with sexy Instagram feeds. Info products with 90% margins.

Meanwhile, boring service businesses are trading at 2-3x and throwing off cash like ATM machines.

The problem? Most buyers can't see past the Excel spreadsheets and the founder doing all the work.

Let me show you a deal that looks like a job, but is actually a wealth-building machine.

The Deal Everyone Ignored

Business: Commercial HVAC maintenance company
Asking Price: $1.8M
Annual Revenue: $2.1M
EBITDA: $780K (37% margin)
Multiple: 2.3x EBITDA
Recurring Contracts: $1.4M (67% of revenue)
Employees: 4 technicians + 1 admin
Customers: 127 commercial clients
Average Contract: $11,024/year
Contract Renewal Rate: 92%

Why This Sat on the Market for 6 Months:

• "Unsexy" industry (nobody brags about buying an HVAC company)

• Looks founder-dependent (he handles all sales)

• Low tech (still using QuickBooks from 2015)

• In a mid-sized city (not San Francisco or Austin)

• Service business (people want "passive income")

Every tire-kicker looked at this and thought "That's just buying myself a job."

I looked at this and thought "That's a $6M exit in 36 months with minimal work."

Here's why they're wrong and I'm right.

Part 1: The Cash Flow Nobody Appreciates

$780K EBITDA on $1.8M purchase price.

That's a 43% cash-on-cash return in year one.

Let me say that again: You make back 43% of your purchase price in the first year.

Compare that to:

• S&P 500: 10% annual return

• Real estate: 8-12% cash-on-cash (if you're good)

• SaaS business: 15-20% cash-on-cash (after debt service)

This HVAC company prints money.

The Cash Flow Timeline:

Month 1: Collect $180K from annual contracts paid upfront (67 customers prepay)
Month 1-12: Collect $120K/month from monthly billing customers
Operating expenses: $110K/month (technicians, vehicles, tools, insurance, admin)

Net cash generation: $10K/month + that $180K upfront = $300K+ annual free cash flow

After debt service ($12K/month on SBA loan), you're still clearing $156K in your pocket annually.

That's passive income while you build enterprise value.

The Founder's Books (What He's Not Showing You):

I dug into the financials. The founder is running $95K in personal expenses through the business:

• His F-250 truck ($28K/year lease + gas)

• "Business dinners" that are clearly family meals ($12K/year)

• His cell phone, home internet, home office ($8K/year)

• Health insurance for whole family ($31K/year)

• "Training" trips to Florida and Vegas ($16K/year)

Add that back = $875K EBITDA (42% margin)

The real multiple? 2.06x EBITDA.

You're buying a business throwing off $875K annually for less than 2x cash flow.

This is stupid cheap.

Part 2: The Recurring Revenue Goldmine

$1.4M of the $2.1M is recurring maintenance contracts.

Let me explain why this is a cheat code:

Customer Contract Structure:

• Annual maintenance agreement: $8,000-$15,000 depending on building size

• Includes: quarterly preventative maintenance, priority emergency service, 15% discount on repairs

• Renewal rate: 92%

• Customer lifetime: Average 6.7 years (from customer data)

Customer Lifetime Value:

• Average annual contract: $11,024

• Average customer lifetime: 6.7 years

• Customer LTV: $73,860

• Customer acquisition cost: $840 (I'll explain this)

LTV:CAC ratio: 88:1

That's not a typo. You spend $840 to acquire a customer worth $73,860.

For context:

• Good SaaS business: 3:1

• Great SaaS business: 5:1

• This HVAC company: 88:1

Why so high? Because commercial HVAC contracts are sticky as hell. Once you're maintaining a building's system, the switching cost is massive. The customer would need to:

1. Find a new vendor

2. Have them learn their entire system

3. Risk downtime during transition

4. Probably pay more (the incumbent has pricing power)

Nobody switches HVAC companies unless you screw up badly.

The Contract Analysis Nobody Did:

I looked at the customer list:

• 34 office buildings (average contract: $12,400)

• 28 retail spaces (average contract: $9,200)

• 19 restaurants (average contract: $14,800)

• 22 medical offices (average contract: $11,600)

• 24 other commercial (warehouses, gyms, etc., average: $8,900)

The restaurants are the goldmine. They pay the most, renew at 96%, and need emergency service constantly (more revenue).

Current Mix:

• Restaurants: 15% of customers, 24% of revenue

• Should be: 40% of customers, 50% of revenue

There's your growth strategy.

Part 3: The Founder Dependency Myth

Every buyer says: "The founder does all the sales. This is founder-dependent."

Let's examine what "sales" actually means in this business:

How Customers Find This Business:

• Referrals from existing customers: 58%

• Google search/website: 31%

• Cold outreach by founder: 11%

The founder isn't some sales wizard. He just answers the phone when people call and doesn't screw up the close.

The "Sales Process":

1. Building manager calls because their current HVAC company sucks

2. Founder schedules site visit

3. Walks the building, takes notes on equipment

4. Sends proposal within 24 hours

5. Follows up once

6. Customer signs (78% close rate)

This isn't enterprise SaaS sales. This is order-taking.

The close rate is 78% because by the time someone calls, they're already pissed at their current vendor. You just need to not be terrible.

The Founder Dependency Test:

The founder went on a 3-week vacation to Europe last summer (I asked for the monthly financials).

Revenue that month: $189K
Average monthly revenue: $175K
New contracts signed while he was gone: 2 (admin handled inbound, founder closed via email from Italy)

The business didn't collapse. It actually did better than average.

Why? Because commercial HVAC maintenance is a recurring revenue business. The work happens whether the founder is there or not.

The Real Dependency:

The business isn't dependent on the founder for sales. It's dependent on him for not hiring someone to do sales.

Hire a business development person at $65K + 5% commission on new contracts. They'd close 20-30 new contracts annually (founder closes 15 while doing everything else).

Cost: $90K/year (base + commissions)
Added revenue: $220K+ in new annual contracts
Added EBITDA: $92K (42% margin)
ROI: 102% in year one

You just made the business less founder-dependent AND more profitable.

Part 4: The Tech Stack Nobody Built

The founder uses:

• QuickBooks 2015 (seriously)

• Google Calendar

• A literal paper filing system for customer records

• Excel spreadsheet for scheduling technicians

• His memory for customer preferences and history

The result:

• Double-booked technicians (happens monthly)

• Lost customer notes (technicians show up not knowing the history)

• No automated reminders (customers forget renewals)

• No tracking of equipment age (missing upsell opportunities)

• Zero data on technician productivity

This is a $2.1M business running on 1995 technology.

The Tech Stack Implementation ($18K Total Investment):

Phase 1: Customer Relationship Management ($5K)

• ServiceTitan or Housecall Pro (HVAC-specific CRM)

• All customer data centralized

• Automated contract renewal reminders (60 days before expiration)

• Automatic review requests post-service

• Customer portal for invoices and scheduling

Impact: Contract renewal rate jumps from 92% to 97% = $70K saved in churn

Phase 2: Technician Management ($8K)

• GPS tracking on vehicles (reduce drive time)

• Digital work orders (no more paper, faster invoicing)

• Inventory management (know what parts are on trucks)

• Real-time scheduling optimization

Impact: Technicians complete 6 jobs/day instead of 4.7 = 28% productivity increase = room for $630K more revenue with same labor

Phase 3: Marketing Automation ($5K)

• Simple website rebuild (current site looks like 2008)

• Google Business Profile optimization

• Email automation for maintenance reminders

• SMS reminders for appointments (reduce no-shows)

Impact: Inbound leads increase from 4/month to 10/month = 72 additional leads/year = 30+ new contracts annually at 78% close rate = $330K added revenue

Total tech investment: $18K
Total added EBITDA in year one: $215K
ROI: 1,194%

And you haven't even tried yet.

Part 5: The Geographic Monopoly

The business operates in a city of 280,000 people (metro area: 450,000).

Current market penetration:

• Total commercial buildings in the area: ~2,400

• Buildings over 10,000 sq ft (their target): ~840

• Their current customers: 127

• Market share: 15%

They own 15% of the addressable market without trying.

Competitor Analysis:

There are 7 other commercial HVAC companies in the market:

• 2 are residential-focused (not real competition)

• 3 are tiny (1-2 person operations, can't handle commercial scale)

• 2 are real competitors (similar size)

I called 5 commercial building managers pretending to need HVAC service. Here's what I learned:

• Competitor A: "They're okay but expensive and slow to respond"

• Competitor B: "They're fine for emergencies but don't do preventative maintenance well"

• This business: "They're great, super reliable, fair pricing, been with them for 4 years"

The Market Opportunity:

840 target buildings - 127 current customers = 713 buildings up for grabs

If you capture just 10% more of the market over 36 months (71 buildings), at $11K average contract:

New ARR: $781K
New EBITDA: $328K (42% margin)
Added enterprise value at 4x: $1.31M

You just doubled the value of the business by winning 71 customers in a market where you're already the quality leader.

Part 6: The Pricing Power Nobody Uses

The founder hasn't raised prices in 3 years.

His logic: "I don't want to lose customers."

Let's test that theory.

Current Average Contract: $11,024/year
Market Rate (I called competitors): $12,500-$14,200/year

He's leaving $1,500-$3,000 per customer on the table.

The Pricing Test:

Year 1: Raise prices 8% for all renewals ($883 increase per customer)
Expected churn increase: 1-2 customers out of 127 (based on similar businesses)

Math:

• Lost revenue from 2 churned customers: $22K

• Gained revenue from 125 customers at 8% increase: $112K

• Net gain: $90K (flows straight to EBITDA)

Year 2: Raise another 6% ($660 increase per customer)
Year 3: Raise another 5% ($550 increase per customer)

After 3 years, average contract: $13,121 (19% total increase)
Added EBITDA from pricing alone: $267K annually

At 4x EBITDA, you just added $1.07M in enterprise value by sending new contract terms.

The objection I always hear: "But customers will leave!"

No, they won't. Commercial HVAC is not price-sensitive, it's reliability-sensitive.

A restaurant doesn't care if they pay $12K vs $13K for HVAC maintenance. They care that their AC doesn't die during summer dinner rush.

The switching cost is massive. The risk is high. The price difference is tiny.

You have more pricing power than you think.

Part 7: The Add-On Revenue Sitting There

The business does $700K in "break-fix" revenue (repairs outside maintenance contracts).

That's 33% of total revenue from customers calling with emergencies.

Current Break-Fix Model:

• Customer calls with problem

• Technician diagnoses

• Provides quote

• Customer approves

• Work completed

Average emergency repair: $2,400
Emergency calls per year: 292
Close rate: 87% (customer already trusts you, they say yes)

The Add-On Opportunity:

During every maintenance visit (4 visits per customer per year = 508 visits annually), technicians should be doing equipment health assessments.

"Hey, I noticed your compressor is running hot. Not an emergency now, but in 6-12 months you're looking at a $8,000 replacement. We can do it now during off-season for $6,500 and avoid the emergency."

Current proactive replacement sales: Basically zero (technicians aren't trained to sell)

Industry standard: 15-20% of customers take proactive replacement during maintenance visits

Conservative model:

508 maintenance visits × 15% offer acceptance × $5,000 average proactive project = $381K in new revenue

This is 42% margin work (parts + labor, but no emergency premium pricing).

Added EBITDA: $160K

Training required: One 4-hour workshop on consultative selling for technicians. Cost: $2,500.

ROI: 6,400%.

Part 8: The Acquisition Math (How to Actually Buy This)

Seller wants $1.8M. He's 61 years old and wants to retire to Arizona.

He's motivated. His wife is already there. He's tired.

My Offer:

Structure A: Maximum Leverage

• $1.65M total purchase price (8% discount for fast close)

• $200K down payment (12%)

• $1.2M SBA 7(a) loan at 7.5% (10-year term)

• $250K seller note at 4% (4-year term)

Debt Service:

• SBA loan: $14,200/month

• Seller note: $5,600/month

• Total: $19,800/month

Cash Flow:

• Monthly EBITDA: $65K (using add-backs)

• Debt service: $19,800

• Your net: $45,200/month = $542K annually

You keep $542K in your pocket annually after debt service.

Your $200K down payment pays back in 4.4 months.

Structure B: Owner Financing Heavy

• $1.75M total purchase price

• $350K down payment (20%)

• $1.4M seller note at 5% (6-year term, interest-only first year)

Debt Service:

• Year 1 (interest only): $5,833/month

• Year 2-6 (amortizing): $22,100/month

Cash Flow Year 1:

• Monthly EBITDA: $65K

• Debt service: $5,833

• Your net: $59,167/month = $710K annually

You keep $710K the first year, use it to build the business and increase EBITDA before the note starts amortizing.

Financing Strategy:

Most buyers try to do 100% SBA and then complain they can't get approved.

Smart play: Put down $200-350K, get the seller to carry most of the note. Why?

1. Seller gets his $1.65-1.75M over time (he doesn't need it all now, he's retiring)

2. You conserve cash for operations and growth investments

3. Lower monthly debt service = less risk

4. Seller note interest is usually lower than bank rates

The seller wants to close, not maximize price. Use that.

Part 9: The 36-Month Playbook (How to Build a $6M Business)

Here's exactly how you turn $1.8M into $6M in three years:

Year 1: Foundation & Quick Wins

Month 1-3:

• Implement ServiceTitan CRM ($5K)

• Hire BDR (business development rep) at $65K + commission

• Fire bottom 10% of customers (the ones who haggle every invoice)

• Raise prices 8% on renewals

Month 4-6:

• Train technicians on consultative selling

• Rebuild website ($8K)

• Launch Google Ads ($2K/month)

• Add GPS tracking to vehicles

Month 7-12:

• Hire 5th technician (capacity for $300K more revenue)

• Implement email/SMS automation

• Focus BDR on restaurant vertical (highest value)

• Test direct mail to commercial buildings

Year 1 Results:

• Revenue: $2.6M (24% growth)

• EBITDA: $1.1M (42% margin)

• New customers added: 38

• Lost customers: 7

• Net: 31 new customers

Year 2: Scale What Works

Month 13-18:

• Hire 6th technician

• Double Google Ads spend ($4K/month)

• Launch preventative replacement program

• Add second BDR (focus on medical offices)

Month 19-24:

• Acquire small competitor ($300K purchase, 22 customers)

• Promote lead technician to operations manager ($85K salary)

• Implement technician productivity bonuses

• Expand service area to neighboring town (45K people)

Year 2 Results:

• Revenue: $3.4M (31% growth)

• EBITDA: $1.42M (42% margin)

• New customers: 67 (including acquisition)

• Lost customers: 9

Year 3: Exit Prep

Month 25-30:

• Document all systems/SOPs

• Hire general manager ($95K salary)

• Remove yourself from day-to-day (prove it's not founder-dependent)

• Lock in 3-year contracts with top 30 customers

Month 31-36:

• Clean up books (get audit-ready)

• Show consistent EBITDA growth

• Get to $4.2M revenue run rate

• Show 18-month trailing EBITDA of $1.5M+

Year 3 Results:

• Revenue: $4.2M (24% growth)

• EBITDA: $1.58M (38% margin, lower due to GM hire)

• Total customers: 215

• Churn rate: 5% annually (down from 8%)

Exit Multiple: 3.8-4.2x EBITDA (higher than purchase because growth + systems + lower churn)

Exit Value: $6.0M - $6.6M

Your Return:

• Purchase price: $1.8M

• Cash invested: $200-350K (depending on structure)

• Exit proceeds: $6.0-6.6M

• Debt paydown: ~$600K paid off from cash flow

• Net profit: $4.4M - $5.0M over 36 months

Plus you collected $1.2M+ in distributions during ownership.

Total return: $5.6M - $6.2M on $200-350K invested = 1,600-3,100% ROI over 36 months

Part 10: The Risks (What Actually Kills This Deal)

Risk 1: Technician Turnover (45% Probability)

If you lose 2-3 technicians, you can't service customers. Revenue drops. Customers churn.

Mitigation:

• Pay technicians better than market (you have the margin)

• Implement profit-sharing (they make more when business grows)

• Invest in training and certifications (makes them more valuable)

• Hire apprentices (always have pipeline)

Risk 2: Major Customer Loss (25% Probability)

Your top 5 customers are 22% of revenue. If one leaves, it hurts.

Mitigation:

• Lock largest customers into 3-year contracts (offer 10% discount)

• Assign dedicated technician to top 10 customers

• Quarterly business reviews with large clients

• Overdeliver on service (literally cannot afford to lose them)

Risk 3: Equipment Failure/Liability (15% Probability)

Screw up an HVAC system in a hospital or restaurant. Get sued. Insurance might not cover all of it.

Mitigation:

• Increase liability insurance to $2M (costs $8K more/year)

• Implement QA checklist for all work

• Have senior technician review all major repairs

• Build $100K reserve fund for emergencies

Risk 4: Economic Recession (30% Probability)

Restaurants close. Office buildings have vacancies. Maintenance contracts get cut.

Mitigation:

• HVAC maintenance is relatively recession-resistant (buildings need heating/cooling)

• Focus on medical and essential retail (less cyclical)

• Offer payment plans to help customers keep contracts

• Having 42% EBITDA margin gives you room to weather storms

Risk 5: You Hire Wrong (50% Probability)

Bad BDR doesn't sell. Bad technician pisses off customers. Bad GM runs business into ground.

Mitigation:

• Hire slowly, fire quickly

• Use temp-to-hire for first 90 days

• Check references religiously

• Start people on small projects before giving them big responsibility

The Verdict: Who Should Buy This Business?

This deal is NOT for:

• People who need passive income (first year is hands-on)

• Anyone who thinks service businesses are "beneath them"

• Buyers who can't manage blue-collar workers

• People allergic to operations (scheduling, dispatch, inventory)

This deal IS perfect for:

• Operators who understand service businesses

• People who want cash flow NOW (not in 5 years)

• Buyers with trade/construction background

• Anyone who can see past "unsexy" to profitable

Required Skills:

1. Basic people management (you'll have 5-7 employees)

2. Sales skills (or willingness to hire someone who has them)

3. Operations fundamentals (scheduling, routing, efficiency)

4. Customer service mindset (this is a trust business)

The Honest Truth:

This business won't make you cool at parties. Nobody will be impressed when you say you bought an HVAC company.

But this business will make you rich.

$542K in your pocket in year one. $6M+ exit in year three. And you'll sleep well at night because the business model is simple, the margins are fat, and the customers are loyal.

Sometimes the best deals are the boring ones everyone else ignores.

The Best Deals Never Hit the Market

You know what's interesting?

This HVAC deal sat on BizBuySell for 6 months. Everyone saw it. Nobody wanted it.

The owner finally sold it to a local operator for $1.65M (the price I recommended). That operator is now clearing $600K+ annually and the business is worth $4M+ just 18 months later.

The lesson?

The best deals are often hiding in plain sight. But most buyers can't recognize value when they see it.

They want sexy. They want tech. They want "passive income."

What they should want is profit, cash flow, and defensible market position.

That's what we find at The Continental.

We don't source SaaS businesses with 8% EBITDA margins trading at 6x because "it's a SaaS business."

We source profitable, boring, cash-flowing businesses that throw off real money from day one:

• Service businesses with recurring revenue

• "Unsexy" e-commerce brands printing cash

• B2B SaaS companies that actually make money

• Legacy businesses that need simple fixes

What You Get:

• 2-3 pre-vetted deals per month that match your criteria

• Full financial analysis (just like this breakdown) showing the real opportunity

• Direct introductions to motivated sellers (often before they list publicly)

• Support through diligence, structuring, and closing

We focus on one thing: Finding deals where the math actually works.

Not "growth at all costs" startups. Not money-losing SaaS companies. Not overleveraged e-commerce brands.

Real businesses, generating real profit, available at real prices.

The type of deals that actually build wealth.

Ready to see what we can find for you?

Upgrade to The Continental or schedule a call with our team to discuss what you're looking for.

While everyone else is chasing unicorns, we'll help you find the profitable, boring businesses that actually make you rich.

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