Matt Cafrelli, a former CPA, made a daring leap into acquisition entrepreneurship, partnering to create a HoldCo focused on home service businesses. He shares the thrill and challenges of acquiring a window cleaning company and a landscaping business in quick succession. The conversation dives into the booming luxury landscaping market in Texas, strategic growth tactics, and the complexities of maintaining a 50-50 business partnership. With insights on community relationships and navigating mergers, Matt provides a fascinating look at the shift from accounting to entrepreneurship.
Matt Cafrelli transitioned from CPA to acquisition entrepreneurship, focusing on smaller businesses to avoid high risks and investor pressures.
He emphasizes building strong relationships within the community and operational management to stabilize revenue in the home services sector.
Deep dives
Transition from CPA to Business Owner
Matt Caffrelli transitioned from a career as a CPA working long hours in public accounting to becoming a business owner in the home services sector. He and his business partner, both former CPAs, were inspired by the book 'Buy Then Build' by Walker Deibel, which motivated them to explore entrepreneurship through acquisition. They completed their first acquisition—a window cleaning and gutter cleaning business—in April 2023, followed by a landscaping business in March 2024. This shift allowed them to leave behind the taxing demands of accounting while engaging in a field they found enjoyable and rewarding.
Acquisition Strategy and Market Insights
Caffrelli's decision to focus on smaller businesses, which generated around $500,000 in revenue rather than pursuing larger enterprises, stemmed from his desire to avoid bringing on outside investors and managing high debt levels. By opting for self-funded acquisitions with an average purchase price of approximately 2.3 times seller's discretionary earnings, they could enter the market without overwhelming risks. They successfully navigated challenges in the home services industry, particularly with a fluctuating client base in landscaping due to the importance of relationships in small-town markets. This approach positioned them to capitalize on the growing demand for quality service in areas experiencing rapid population growth during economic shifts.
Operational Challenges and Revenue Trends
Once acquiring their businesses, Caffrelli and his partner faced varying operational challenges. The landscaping business, lacking an operations manager, experienced a bumpier transition, resulting in a churn of customers due to the established relationships of the previous owner. In contrast, the window cleaning business included an operations manager, easing their transition with minimal loss of revenue. They adjusted their focus toward large commercial contracts to stabilize revenue streams and responded proactively to shifting market dynamics, demonstrating their adaptability in the face of obstacles.
Long-Term Vision and Growth Strategy
Caffrelli aims to maintain continued growth through strategic acquisitions in the home services market, with specific focus on landscaping. With aspirations to increase overall revenue to between $1 million and $1.2 million, they plan to adopt a measured cadence of acquiring one business per year. This approach will allow them to enhance operational management before diversifying their portfolio. Ultimately, they seek to build a business structure attractive to potential buyers while emphasizing the importance of developing relationships with staff, customers, and the local community.
Matt Cafrelli left a stable career in accounting to dive into the riskier world of acquisition entrepreneurship. He and his partner created a HoldCo to buy some service businesses. Their first acquisition was a window cleaning company in April 2023, followed quickly by a landscaping business in March 2024. We discuss the pros and cons of buying on the small side, future acquisitions, and their long term goals for the holding company.
Matt Cafrelli: https://www.linkedin.com/in/mattcafrelli/ Clint Fiore and Bison Business: https://bisonbusiness.com/ Patrick Dichter and Appletree: https://appletreebusiness.com/
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