Forklift Repair Business: A Hidden Gem in B2B Services

From Corporate Sales to Small Business Owner

Sean Lindley's journey into business ownership began unexpectedly. After a successful career in enterprise software sales at SAP, Sean found himself laid off in early 2024. This pivotal moment led him to reassess his career path and explore entrepreneurship through acquisition (ETA).

Early Entrepreneurial Experience

Sean was no stranger to small business ownership. In his early 20s, he had purchased and operated a franchise restaurant:

"I had done ETA before I even knew what ETA was. I ended up buying a franchise restaurant from the owner who wanted to get out when I was 23. I owned it for three years and ended up selling it, making a little profit. It changed my mind on the power of ETA."

This experience gave Sean a taste of entrepreneurship, but he chose to pursue a corporate career in sales for the next 14 years. However, the unexpected layoff prompted him to revisit the idea of business ownership.

The Search Process

Sean approached his business search methodically:

1. He created a list of personal and professional priorities
2. Listened to business acquisition podcasts like Acquiring Minds
3. Networked with mentors and industry professionals
4. Explored various industries including home services, IT, and landscaping
5. Developed search criteria for potential acquisitions

Search Criteria

Sean's key criteria for potential acquisitions included:

• Businesses valued between $750,000 to $5 million
• Minimum of $350,000 in seller's discretionary earnings (SDE)
• At least 15 years in operation
• Retiring owners preferred
• Located in the Austin or San Antonio area

Proprietary Search Efforts

Sean conducted a targeted outreach campaign for landscaping businesses:

"I created a one-page PDF letter with my picture on it, a palm tree emblem, and a picture of me and my family. I sent out about 150 mailers to landscaping businesses in the Austin area."

While this effort yielded some conversations, it didn't directly lead to an acquisition. However, it helped Sean refine his search process and industry focus.

The Forklift Repair Opportunity

In April 2024, Sean discovered a listing for a 31-year-old forklift repair and maintenance business on BizBuySell. The business immediately caught his attention:

"I looked at the CIM (Confidential Information Memorandum) and thought, 'Man, this is really attractive. What's the catch?'"

Key Business Attributes

• 31 years in operation
• $1.2 million in annual revenue
• $550,000 in seller's discretionary earnings (SDE)
• High profit margins
• Asset-light business model
• Diverse customer base with no significant concentration
• Mix of recurring maintenance revenue (43%) and repair revenue (57%)

The Acquisition Process

Sean moved quickly to pursue the opportunity:

1. He had an initial call with the broker and owners on a Thursday
2. Visited the business in person that Saturday
3. Submitted a letter of intent (LOI) within 48 hours

However, Sean learned that another offer had already been accepted. Disappointed but undeterred, he maintained contact with the broker. Two and a half weeks later, he received news that the initial deal had fallen through, giving him a second chance at the acquisition.

Deal Structure and Financing

Sean structured the deal as follows:

• 80% SBA financing
• 10% seller financing
• 10% buyer equity

The final purchase price represented a 2.7x multiple of the business's SDE. Sean emphasized the importance of securing adequate working capital and a line of credit as part of the SBA loan package:

"I really pushed on the banks to get the most amount of working capital that I could and to get a line of credit. I knew I was going to need to buy trucks and possibly invest in software and additional salaries."

He ultimately secured financing through Wells Fargo at a favorable interest rate of Prime minus 0.25%.

Business Operations and Growth Opportunities

The forklift repair business, now operating as RNR Lift, provides critical maintenance and repair services for forklifts used in warehouses, construction sites, and other industrial settings. Sean identified several key growth opportunities:

1. Modernizing Marketing and Operations

"When I saw this business, I about jumped through the roof because the website was from 1999. They were not on Google - you literally could not find them if you searched 'forklift repair Austin Texas'. Their only marketing spend was $5,000 per year on Yellow Pages ads."

Sean immediately focused on improving the company's online presence and implementing modern marketing strategies.

2. Expanding Service Capacity

The primary constraint on growth is the availability of skilled technicians. Sean is actively working on recruiting and retaining top talent:

"Hiring is what I spend most of my time on. It's a niche industry, so there are forklift mechanics out there, but it's not like an automotive repair place where there are thousands of technicians."

3. Geographic Expansion

Long-term, Sean sees potential for expanding into other Texas cities and possibly pursuing M&A opportunities within the industry.

Challenges and Lessons Learned

1. The Importance of Speed in Deal-Making

Sean's experience of initially missing out on the deal due to another offer being accepted taught him the value of moving quickly in the acquisition process.

2. Balancing Growth with Quality Service

"I have to make sure that I keep our current customer base happy and that we are providing quality A+ service. I don't want to grow too fast and not be able to fulfill the demand."

3. Navigating the Transition from Corporate to Small Business

Sean has had to adjust to a different pace and set of responsibilities as a small business owner compared to his previous corporate roles.

The Value of Mentorship in the Acquisition Process

Sean emphasized the importance of having a mentor throughout his search and acquisition journey. He connected with Mike Loftus, a previous Acquiring Minds podcast guest who had built and acquired multiple landscaping businesses:

"I reached out to him and told him my story, what I was looking for, and that I wasn't here to waste his time. I wanted to pay him for his time."

This mentorship relationship proved invaluable, even as Sean's focus shifted from landscaping to the forklift industry. Mike provided guidance on:

• Evaluating potential deals
• Negotiating with sellers and banks
• Preparing for the transition to ownership
• Operational considerations

Sean recommends that other searchers consider seeking out paid mentorship arrangements with experienced entrepreneurs in their target industries.

Looking to the Future

Sean sees RNR Lift as a long-term family business with significant growth potential:

"I'm in this for the long haul. I want to build a family business and have something that my son can ride around with me once he gets old enough to get a good work ethic."

His vision includes:

1. Steady organic growth in the Austin and San Antonio markets
2. Potential expansion into other Texas cities
3. Exploring M&A opportunities within the industry
4. Eventually hiring an operator to manage day-to-day operations

Sean's journey from corporate sales executive to small business owner demonstrates the opportunities available in niche B2B service industries. By identifying an established business with strong fundamentals and clear avenues for modernization and growth, he has positioned himself for long-term success in the world of entrepreneurship through acquisition.

For aspiring business buyers, Sean's story highlights the importance of:

1. Thorough preparation and industry research
2. Developing clear acquisition criteria
3. Moving quickly when opportunities arise
4. Securing adequate financing and working capital
5. Seeking mentorship from experienced entrepreneurs
6. Balancing growth ambitions with maintaining quality service

As the business landscape continues to evolve, opportunities in specialized B2B services like forklift repair and maintenance are likely to persist. Sean Lindley's experience with RNR Lift serves as an inspiring example for those looking to make the transition from corporate careers to small business ownership through acquisition.

Article created from: https://www.youtube.com/watch?v=3Gz3KEggzRY