Investment criteria
The full picture, with the reasoning behind each line — so a broker can qualify us in one reading, and an owner can tell whether this is worth a phone call.
These are starting points, not hard walls. A business sitting outside one or two of them is still worth a conversation, and we would rather hear about it than not. The exception is geography: that line we hold, and the reason is on the last row of this page.
Every threshold below exists because of something we would have to live with for thirty years — not because a screen said so. Where the reasoning matters, it is written underneath.
Financial profile
- Revenue
- $[X]M – $[Y]M annuallyLarge enough to support a full-time operator and a real management layer; small enough that one owner can genuinely know the business.
- SDE / EBITDA
- $[X]K – $[Y]KThe range that services acquisition debt and still leaves room to reinvest. Anything thinner forces short-term decisions we have committed not to make.
- Profitability
- [N]+ consecutive years of positive earningsWe are not buying turnarounds. A business that has been profitable through several years has already proven the model works without heroics.
- Margin
- [N]%+ SDE as a share of revenueMargin is the cushion that lets an operator make a mistake in year one without endangering anyone's job.
Revenue quality
- Recurring or repeat revenue
- [N]%+ from contractual, recurring, or repeat-customer sourcesRevenue that returns on its own is what makes a thirty-year hold possible. It also means the first year can be spent learning rather than selling.
- Customer retention
- [N]%+ annual customer or revenue retention preferredHigh retention is the clearest available evidence that customers are being served well — usually a better signal than any growth number.
- Revenue stability
- No single year of decline greater than [N]% over the trailing three yearsCyclicality is manageable. Volatility that nobody in the building can explain is not.
Risk profile
- Customer concentration
- No single customer above [N]% of revenueConcentration transfers control of the business to someone who does not own it. With a long horizon, that risk compounds the wrong way.
- Capital intensity
- Maintenance capital expenditure under [N]% of revenueHeavy maintenance capex quietly consumes the cash that would otherwise fund growth or wages.
- Owner dependence
- [Describe the level of owner involvement you can absorb]Some owner dependence is normal and expected — it is often the reason the business is for sale. What matters is whether the relationships and knowledge can be transferred over a defined transition.
Company profile
- Operating history
- [N]+ years in businessLong enough to have survived at least one bad year, which tells you more than a good one does.
- Employees
- [X] – [Y]Small enough that the owner knows everyone's name, and we intend to as well.
- Management depth
- At least one experienced operational leader below the owner, preferredPreferred, not required. Where it is missing, the transition simply needs to be longer — and we will say so upfront rather than discover it later.
- Industry
- [List target industries — or state that the search is industry-agnostic]Operations-driven businesses where discipline in scheduling, purchasing, and process is a genuine competitive advantage.
- Geography
- New England — Vermont, New Hampshire, Massachusetts, and MaineThis is the one line we hold. We intend to live where the business is and be in the building, which is not something that can be done from a distance or across four states at once.
Bracketed values are placeholders. Every [N] on this page needs a real number before publication. A wrong threshold costs more introductions than a missing one, and brokers will read this page before they read anything else.
What we are not looking for.
Saying this plainly saves everyone a call. None of these are judgements about the businesses — they are simply outside what one operator with a thirty-year horizon can do well.
Turnarounds and distress
A business losing money needs a specialist and a short clock. We are neither. If the last two years were unprofitable, another buyer is better suited to it.
Pre-revenue or venture-stage
We are buying something that already works. If the model still needs proving, the risk profile is wrong for permanent ownership and for the people who work there.
Passive or absentee ownership
If the seller's hope is that the buyer stays away, this is a poor match. The entire premise here is an owner who is present, in the building, for a long time.
Close enough to talk about?
If a business meets most of this, we would like to hear about it. If it misses one line and is strong everywhere else, we would still like to hear about it.
Start a conversation ethan@heckerfh.com