Entrepreneurs Tyrel Sulzer and Bob Boniface discuss the benefits of buying a trade school that trains truckers. Topics include partnered searches, potential in blue collar businesses, buying a CDL school, job opportunities for graduates, competition in CDL training, and the future of trade schools.
Acquiring trade schools can be a strategic investment to address the labor supply shortage in trades and blue collar industries.
Choosing a partnered search fund model for acquisitions allows for split workload, emotional support, and shared economic benefits.
CDL training schools present an attractive opportunity due to projected shortage of truck drivers and growing demand for vocational training as an alternative to college.
Rising college costs and diminishing returns have shifted perception towards vocational training, making trade schools a viable option for job security and higher wages.
Deep dives
Blue Collar Businesses as Strategic Acquisitions
Hiring in the trades and blue collar industries has been challenging, leading entrepreneurs to consider acquiring trade schools or similar education businesses as upstream investments in talent supply. Tyrell Salser and Bob Boniface purchased TransTech, a CDL school, to explore the strategic potential in trade schools. The CDL training industry was appealing due to a projected shortage of truck drivers and the increasing wages in the industry. They saw opportunities to improve the business with technology and leverage the growing demand for vocational training as an alternative to college.
Choosing a Partnered Search Fund
Tyrell and Bob decided to pursue a partnered search fund model instead of a self-funded search. This decision allowed them to split the workload, have emotional support throughout the search process, and share economic benefits. They acknowledged that partnerships require open communication, alignment on goals and values, and the ability to handle disagreements effectively. Working together provided a sense of shared responsibility and created a stronger foundation to tackle the challenges of acquiring and operating a business.
Developing a Thesis for CDL Training Industry
During their search, Tyrell and Bob discovered a need for CDL drivers in the trucking industry. They identified the potential in CDL training schools as the demand for truck drivers was projected to outstrip supply in the coming years. With an economic analysis and a focus on vocational training as an alternative to college, they recognized a market opportunity to acquire and improve CDL schools. The objective measures of success and the respect employees in blue collar businesses have for their work attracted them to the industry.
Transitioning from College to Trade Schools
Tyrell and Bob saw a shift in the perception of vocational training due to rising college costs and diminishing returns on investment. They believed that more individuals would consider trade schools as a viable path to job security and higher wages. They also noted the recession resilience and the practical, objective measure of success in blue collar industries, which made them optimistic about the future of trade schools in filling labor market gaps.
Different Types of Commercial Driver's Licenses (CDLs)
There are different types of commercial driver's licenses (CDLs) based on weight and vehicle layout. Class A licenses are for tractor trailers, while Class B licenses are for vehicles like garbage trucks and passenger buses. Different states have different training requirements for each class.
Demand and Opportunities in the CDL Training Business
There is a sustained and growing demand for CDLs due to factors like the shortage of truckers and the appeal of alternative careers to four-year college degrees. CDL training businesses can serve both individual students and corporate clients. While the corporate market may experience cyclicality, there are other non-cyclical opportunities, such as training drivers for school buses, waste hauling, and utility companies.
TransTech: Size, Growth, and Market Differentiation
TransTech is a medium-sized CDL training business located in North Carolina. It has experienced annual revenue growth of 15-30% through new site expansions, new customers, and marketing efforts. The business has 68 employees and offers professional and compliant training, distinguishing itself from smaller CDL training schools. TransTech aims to grow both organically and through potential expansion to other states in the Southeast.
