[Deal breakdown] Lindsay’s $150k/yr, 10 hr/week carpet cleaning business

Buying a business doesn’t mean you have to walk away from your career.

For some of my students inside Acquisition Ace, it’s just a practical way to build an income stream on the side.

My student Lindsay is a perfect example.

In 2023, she bought a commercial carpet cleaning business that earned her a 150% return on her initial investment in year one.

And the coolest part is:

• She had zero experience in this industry

• She never has to step foot on job sites or clean carpets herself

• She runs the business in just 5 to 10 hours a week

All while still working her full-time job at a tech company.

Here’s a full breakdown of the deal:

The financing

Lindsay bought this commercial carpet cleaning business for $1 million.

She used an SBA 7(a) loan to finance 90% of the purchase price ($900K), with a 10-year term and an 8% interest rate.

The remaining 10% ($100K) came out of her own pocket.

It was a big chunk of change up front, but Lindsay wanted a clean deal with no partners. Financing it this way gave her full control from day one.

The cashflow

After paying:

• The employees’ salaries

• All overhead expenses

• The SBA loan payments

The business was still profiting roughly $15,000 a month.

The total profit in year one was $150k.

And since Lindsay’s initial investment was $100k, that’s a 150% cash-on-cash return.

(Of course, that’s not pure profit. She’ll cash out some of that, and the rest she’ll reinvest into hiring and marketing. Either way, not too shabby!)

The business structure

This was as close to a “turnkey” deal as you could get, because the business already came with a general manager (GM) who was running the day-to-day.

That GM manages both:

• The administrative staff (who do all the scheduling, take orders, and make sure jobs get done)

• The technicians (who handle the actual cleaning on-site)

The whole operation was already a well-oiled machine when Lindsay bought it. So all she had to do was step in as the new owner and focus on high-level decisions.

These days, she spends just 5 to 10 hours a week on the business, plus a weekly check-in with her GM.

More to come next week...

You might be wondering: what does Lindsay actually do each week as the owner?

We’ll explore that in Tuesday’s issue.

I’ll break down her exact workload, and how she keeps this business running with minimal input, while still working her W2 job.

But before I sign off, one more thing:

If you’re considering buying or investing into a small business...

As part of my work with Acquisition Ace, I occasionally find valuable deals (and investment opportunities) before most people hear about them.

And sometimes, I share them with this list.

If you’d like to get those updates, just fill out the 2-minute survey below to let me know you’re interested.

👉 I want to buy a small business (or invest as a silent partner)

Or, if you have a business you want to sell, let me know at the link below:

👉 I want to sell a small business (and I’m looking for buyers)

Onward,

— Ben Kelly