Welcome to the JackQuisitions newsletter, |
Cheap wins attention fast. |
But building an entire business around being the lowest price in the market is a dangerous game. One supplier increase, one labor spike, one bad economic cycle, and the entire model starts breaking underneath you. |
That’s why Spirit Airlines became one of the most interesting business case studies in America. |
Watch: Spirit Airlines was never a real business |
This week’s newsletter looks at how a company built around “cheap” scaled aggressively, dominated attention, and eventually got trapped by the exact strategy that made it successful in the first place. The lessons apply far beyond airlines. They apply to contractors, operators, acquisitions, marketing, pricing, and every business trying to compete in crowded markets today. |
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Ready For Your Next Acquisition? |
Check out these acquisition opportunities that caught my eye this week: |
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Deal Flow Is Picking Back Up in the Trades |
According to Alan Peterson at First Internet Bank, acquisition activity is starting to pick back up across the skilled trades and manufacturing sectors. Sellers are finalizing 2025 financials, more businesses are coming to market, and serious buyers are getting deals done. |
The buyers standing out right now usually have: |
Experience managing people, budgets, or operations Leadership experience in service businesses Clear financials and realistic expectations A bank pre-qualification letter in hand
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Alan and his team are helping operators get prepared early so they can move quickly when the right opportunity hits the market. |
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Cheap Is Not a Moat in the Trades |
A lot of home service companies are quietly building the Spirit Airlines version of an HVAC, plumbing, or electrical business. And that’s a BIG mistake. |
Ultra-low dispatch fees. Cheapest install in town. Deep discounts everywhere. “Free” everything upfront with the hope that the back end makes up for it later. |
And for a while, it works. |
Cheap pricing gets the phone to ring. It drives volume. It gets homeowners to click the ad, fill out the form, or book the estimate. |
But the problem starts when your entire business model depends on staying cheaper than everyone else forever. |
That’s the trap. |
In the trades, your costs rarely stay flat long enough to sustain that strategy long term. Labor gets more expensive. Trucks get more expensive. Equipment gets more expensive. Insurance goes up. Fuel goes up. Marketing costs go up. Interest rates go up. |
Meanwhile, homeowners are becoming more educated buyers. |
They will still shop price. But they also care about response times, professionalism, financing options, communication, reviews, guarantees, memberships, and overall experience. |
That’s where a lot of operators get squeezed. |
If your only differentiator is “we’re cheaper,” you leave yourself with almost no margin for error when the market changes. |
The strongest operators in the trades are building businesses with multiple advantages layered together: |
Strong brand reputation High review counts and ratings Fast speed-to-lead systems Financing and payment flexibility Membership programs Better customer communication Strong technician training Better operational efficiency Lifecycle marketing and repeat business
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Watch: How to make your business grow strong and fast |
Price still matters. It always will. |
But cheap alone is fragile. |
You see this happen constantly in contracting. A company undercuts the market aggressively to gain volume. Then labor costs rise, install callbacks increase, marketing gets expensive, or cash flow tightens up. Suddenly the margins disappear and the business starts operating with no room to breathe. |
The companies that survive long term usually have something deeper than price protecting them. |
Some have operational scale. Some have better service. Some have stronger customer loyalty. Some dominate local reviews. Some win on financing. Some win on speed and consistency. |
But very few great businesses win solely because they are the cheapest forever. |
That’s the real lesson from Spirit Airlines. |
Low price can absolutely be part of your strategy. But if it’s your only strategy, you’re fighting a knife fight every single day. |
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Tell Me What You’re Thinking |
The businesses that survive long term are rarely the cheapest; they’re the ones customers trust enough to stop shopping around. |
How do you feel about today's JackQuisitions newsletter? |
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Disclosure: Some of the content and links in this newsletter are sponsored or affiliate links, which means we may receive payment or earn a commission if you click through or purchase. However, all opinions expressed are entirely my own. |
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