Welcome to the JackQuisitions newsletter, |
Growing from $2.5M to $7M in 12 months is no easy task, but that's exactly what the most recent guest of the JackQuisitions podcast accomplished. |
His story has me excited about what the new year will bring. Keep reading for the details. |
But first, would you mind leaving me a podcast review? |
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Ready For Your Next Acquisition? |
Check out these acquisition opportunities that caught my eye this week: |
A residential HVAC service and installation business in Missoula, Montana, established in 2022, listed for $350,000, generating approximately $237,000 in gross revenue and $135,000 in cash flow, with a lean operation and significant room for growth. A residential and commercial painting business in the Philadelphia area, established in 2013, listed for $440,000, generating approximately $925,000 in annual revenue and $150,000 in cash flow, operating with a small team under a well-established national brand. A family-owned roofing and exterior services business in Ohio, focused on roofing, gutters, siding, and custom sheet metal work, listed for $4,800,000, generating approximately $3,000,000 in gross revenue and $1,000,000 in cash flow, with established operations, a skilled team, and decades of market presence.
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Scaling Looks Fast Until You're Inside It |
From the outside, going from $2.5M to $7M in 12 months looks like momentum. |
More revenue. More people. More locations. More traction. |
After sitting down with Ian Smith, partner at South River Capital, it became clear that the internal experience felt much heavier. The business entered a higher weight class almost overnight, and existing systems revealed their limits immediately. |
Acquisitions pushed the organization to $7M first. Operational maturity had to follow. |
Revenue Did Not Create the Scale |
Ian was direct about where the jump came from. |
The growth came from buying revenue. One landscaping business turned into three operating companies inside six months. Headcount nearly quadrupled. Locations multiplied. Complexity arrived immediately. |
Scale followed operations. Revenue followed decisions. |
Acquisitions accelerated exposure long before structure fully caught up. |
The Platform Assumption Breaks Early |
One acquisition carried the label of a platform company. |
On paper, it had SOPs, middle management, and structure. Day-to-day execution relied on pen and paper, magnets on boards, and an owner deeply embedded in decisions. |
That difference mattered. |
Ian explained that building a platform required rethinking tools, workflows, and accountability. Once the owner stepped back, the operating reality surfaced quickly. |
Owner Dependency Defines Risk |
This theme came up repeatedly in our conversation. |
One business relied heavily on the owner for scheduling, decisions, and customer flow. Another continued operating smoothly during extended absences. |
That contrast explained everything. |
Owner dependency became the clearest indicator of long-term risk. |
Integration Functions as a Survival Phase |
Ian walked through how consolidation actually unfolded. |
Each company stayed separate at first. Workflows were observed closely. Systems rolled out deliberately. Brand consolidation followed clarity. |
That sequence reduced customer confusion and employee friction. It also created space to correct early assumptions before they became permanent problems. |
Systems Debt Converts Into Cash Pressure |
Some of the most damaging issues stayed invisible early on. |
Invoicing lagged behind production. AR appeared healthy while cash stretched thinner each week. A platform decision created phantom AR that masked timing issues. |
Ian described this as one of the hardest lessons of rapid scale. |
Mistakes surfaced later through margin erosion and delayed visibility. |
Financial Cadence Restored Control |
Monthly financial reviews became a turning point. |
One major division drifted toward breakeven while revenue still looked stable. That visibility triggered targeted hires and operational focus early enough to reverse the trend. |
Financial cadence preserved optionality during a volatile period. |
Size Amplifies What Already Exists |
The jump from 20 people to 75 surfaced pay inconsistencies, cultural gaps, and management strain immediately. |
Ian was clear that alignment does not appear automatically with size. Structure, communication, and reinforcement scale with intent. |
Revenue magnifies whatever already exists. |
The Real Lesson |
This episode was not about fast growth. It was about forced evolution. |
Acquisitions created momentum. Complexity followed. Control returned through deliberate operational rebuilds. |
As Ian put it, revenue can be acquired quickly. Endurance comes from building structure that can actually hold it. |
 | Scaling From $2.5M to $7M in 12 Months Through Acquisitions |
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Tell Me What You're Thinking |
What do you think? Is 2026 the year you make your first (or next) acquisition? |
Share your feedback with me on X or LinkedIn. |
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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