Buy or Build a Business: Which is Best?

What’s up everyone,

Today’s newsletter is all about answering one very important question…

Is it better to buy an existing service business or build from scratch?

We’re going to answer that question, but I first want to share some news.

Our new podcast series, JackQuisitions, is launching May 2nd. As you can tell by the name, it’s all about acquisitions. Help us prepare by answering this poll question ⬇️ 

Okay…back to the question at hand.: Is it better to buy an existing service business or build from scratch?

Let me start with this. There’s no right or wrong answer. After all, I’ve bought a bunch of companies over the years. It’s how we grew early on.

However, at this stage, I’ve lost almost all interest in acquiring businesses under $5M. Below, I fill you in on the “why.”

But, before that, a word from FieldPulse, the all-in-one field service management solution built specifically for field service teams.

Here’s why I recommend it: FieldPulse is designed to simplify your day-to-day operations by combining everything you need into one platform. You get access to…

• Multiple integrations

• Advanced tools/features for CRM, estimates, and invoices

• “Good-better-best” proposals

• Maintenance plans

• Scheduling and dispatching

And that’s just the start.

In the meantime, I urge you to check them out.

The Buy or Build Debate

I get asked this all the time: Is it better to buy a business or build one from scratch?

After doing both, my answer today is simple: I’d build. But there’s more to the story than that.

Tip: You can find Jack’s ultimate guide to home service acquisitions here.

It’s almost always cheaper to build

We recently looked at a roofing company listed for $6.75M on $3M in revenue and a claimed $1M in cash flow.

Everything about it was vague — flat numbers, questionable margins, and no real infrastructure. No office, five employees, subs doing the work, and “cash flow” that felt more like wishful thinking.

I asked myself the same question I always do: What would it cost me to build this myself?

In that case? Maybe $900K — including trucks, hiring, and marketing.
Why pay 6-7x when I could outbuild it in 12–18 months?

Most listings are full of red flags

When we analyze listings, these patterns show up all the time:

• Rounded numbers (e.g. “$3M revenue, $1M profit”) = lazy financials

• SDE used instead of EBITDA = unclear true margins

• No office or brand presence = zero infrastructure

• Owner is still the business = risk walks out the door on Day 1

One business had $1.3M in revenue and wanted $810K. I could rebuild that for $150K inside our machine. No question.

Does it ever make sense to buy?

Sure. If you’re doing $1M and want to double, buying another $1M business can get you there — fast.

But for where we are now, I’m not interested in paying full freight for something I could spin up for less money and fewer headaches.

If I’m spending real money, I want:

• Scale (>$5M revenue)

• Operational maturity

• New markets or capabilities

• Synergies that amplify what we already do

Otherwise? I’d rather build it myself.

Remember this

Buying can shortcut growth — but only if the deal is tight and the value is real.

If you’re evaluating a sub-$5M service business, ask:

Could I build this cheaper, faster, and stronger on my own?

If the answer is yes, skip the acquisition.

Your energy’s too valuable to waste on a fixer-upper.

Learn more about “buying or building” in yesterday’s podcast ⬇️ 

Listen on Apple Podcasts 
Listen on Spotify
Watch on YouTube

Quick Staffers for Quick Staffing

My co-host Jack Carr just launched Quick Staffers — a service that places pre-trained overseas CSRs with real HVAC and plumbing experience. They know the lingo, handle calls like pros, and cost half as much as local hires.

Disclosure: This newsletter includes sponsored content. However, all opinions expressed are entirely my own.

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