Alicia Powers·May 11, 2026

How to Structure Around Risk in a $250k SDE Acquisition | Alicia Powers Interview

Alicia Powers, a former Air Force officer and construction industry executive (Schindler Elevators, Kohler's residential shower division), acquired a 33-year-old San Diego design-build residential general contractor from an owner nearing retirement, paying $750k (3x SDE of $250k) with 100% seller financing — no bank involved. The deal was structured specifically around risk: no down payment at close (split over 6 months), an 18-month standby on the seller note, a 50% personal guarantee, and 18 months of unpaid mentorship from the seller, who kept his works-in-progress but remained actively involved in the transition. Alicia's thesis rests on San Diego macro tailwinds (Prop 13 incentives to remodel rather than move, housing density), her own GC license and residential lead-generation expertise from Kohler, and the legacy value of the firm's subcontractor relationships, license history, and documented past performance. The hardest realities post-close have been a thinner-than-expected pipeline (the seller had done no marketing for 3–4 years), longer-than-modeled sales cycles (6–24 months from lead to construction start), California payment regulations constraining upfront cash collection, and the immediate lack of any revenue since the seller retained all in-progress work. Alicia is currently taking no salary, supported by her husband's corporate income, and is focused on digitizing operations, building a marketing funnel, and growing the business before potentially expanding into commercial or government contracting.

Deal facts

purchase price: $750k
multiple: 3x SDE
sde ebitda: SDE $250k
revenue: $1.6m–$2m (3-year range)
financing structure: 100% seller financing: ~20% down (split: smaller portion at close, remainder at 6 months) + 80% seller note at 4% for 5 years, note on standby for 18 months post-close; no SBA, no bank; 50% personal guarantee
notes: Stock sale (to preserve license number, insurance history, past performance). Seller retained all works-in-progress and associated revenue/expenses. Seller provided ~18 months of unpaid mentorship (no consulting fee) rolled into deal value. Seller also owns the office building; buyer signed 2-year lease. Buyer contributed ~$20k additional working capital post-close.

Why this business

Alicia was drawn to this specific GC because she was already a customer and had a trusted relationship with the owner, who had no succession plan and was in his late 60s looking for someone to hand his 33-year-old business to. She valued the mentorship structure, her own GC license and construction background, and the macro tailwinds in San Diego (housing density, Prop 13 incentives to remodel rather than move). She also wanted to avoid building a brand for someone else after being laid off while 7 months pregnant.

What's working

Seller-mentor relationship: 18 months of unpaid, full-time mentorship from the founder providing deep knowledge transfer and customer handover
Strong subcontractor network: 30–40 trusted subs with preferential payment and bid terms built over 30 years
Valuable legacy assets: low/old GC license number, long workers' comp history, 30 years of documented past performance (useful for future government contracting)
San Diego macro tailwinds: Prop 13 property tax structure and housing density push homeowners toward additions and remodels rather than moving
Design-build model: charging for design and permitting phases creates early revenue and positions the company as a full-service partner
Operator fit: Alicia's combination of construction background, GC license, and lead-generation expertise from Kohler is highly differentiated for this business type
High ticket sizes ($200k–$700k projects) mean few deals needed to sustain the business; referral close rates are high
Deferred seller note (18-month standby) and split down payment reduced near-term cash pressure significantly

What's hard

Works-in-progress retained by seller meant Alicia started with essentially zero revenue on day one despite paying for a business with $250k SDE
Pipeline was thinner than expected: seller had done no marketing for 3–4 years, so the business was purely referral-based and had no shovel-ready projects queued
Long sales cycles: projects can take 6–12 months or more from first contact to signed contract, and another 1–3 months before first payment is received
California construction payment regulations limit upfront deposits, creating significant working capital challenges
Pro forma was too optimistic: Alicia assumed a 2-month decision cycle for $200k projects; reality is much longer
Key-person risk: superintendent (with the business since 1993) was expected to retire around the same time as the seller
Seller note amortization is 5 years (vs. SBA's 10), which increases monthly debt service when it kicks in
Taking no salary; husband's corporate income supports the family while she reinvests everything back into the business
Operator must be the face of sales and cannot yet afford to hire a manager given current cash flow levels

Notable quotes

I never want to work for somebody else again and I never want to build a brand or build a company for somebody else again.

Finding ways to de-risk, to try to balance out the risk, I think was critical to getting the deal done, but I just did not find myself very excited about garage renovations when I had something that had this much going for it on the other side.

Way too optimistic in how fast the sales cycle was. I thought people would be making decisions on their $200,000 projects in 2 months, and that every 2 months maybe we'd find sign another project. And that just it hasn't been true.

If you don't want to do sales or you're not good at it, I would not come into this business because at the end of the day you have to sell yourself, you have to sell the company, you have to sell the project, you have to sell all the time, constantly, from the very first visit.