Stacking Small Acquisitions to $5m in Revenue

Today's guests set out to acquire cleaning companies. Their search was proprietary. Looking in the greater Seattle area, turns out most cleaning companies are very small sub million dollars of revenue.

But Kyle Boyden and Jake Forfaro were open to such micro acquisitions and stacked the acquired revenue in their nascent platform up to 2.5 million. At that point, they decided to go bigger. Their next two acquisitions got them to the $5 million where they are today.

And only for the most recent acquisition, their seventh, did they finally use an SBA loan. The previous six acquisitions were structured with generous seller financing and low down payments, a key benefit to their approach. Kyle and Jake have only put a combined $100,000 of equity into the project.

Even after servicing seller notes. Their take home cash today stands at $650,000 and the duo owns 90%. Pretty impressive. Now this model is not for the faint of heart.

Buying such small businesses flouts the conventional wisdom on target size. It was very difficult operationally. They plowed what little money the fledgling rollup generated back in, so they had to make money elsewhere.

They themselves say they wouldn't recommend it, but for them in their journeys, it enabled a couple of hungry, scrappy, action oriented entrepreneurs to move quickly and learn. They acquired the revenue very inexpensively. Risk was low, no personal guarantees.

On those first six acquisitions, they built operating muscle, integration muscle, the confidence and competence to run and grow. Their platform today is leagues beyond where it would have been if they just acquired a single $5 million business at the outset. See what you think of how Kyle Boyden and Jake Forfaro have built Rainier Cleaning Solutions.

ENJ welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs.

And on this podcast I talk to the people who do it. Kyle Boyden, Jake Forfaro, welcome to Acquiring Minds. Pleasure to be here.

Thanks for having us. Kyle, Jake. You two are recovering real estate investors now building a roll up in commercial cleaning. I was introduced to you by my own recent guest, Kin Sio.

Kin saw you on stage at an event for real estate investors, which he was at the time, and it was something of a debate. I believe you guys were up there advocating for buying businesses instead of real estate, that that's the better path. Whatever it was, Kin left that hotel conference room a convert.

He walks the path. Bought a business, came on Acquiring Minds to tell us his story. So first question for you guys is, what did you say up there that was so convincing to Kin? Yeah, Kin is now a year recovered as well. So congratulations Kin.