Tim Erickson·August 24, 2023

From Startup Founder to Buying a Small Business | Tim Ericson Interview

Tim Erickson spent 13 years building Zagster, a VC-backed bike-share company that grew to 250 programs in 35 states before being acquired in 2020 for a modest personal outcome. After relocating to Puerto Rico and spending 2022 doing an intensive nationwide search, he bought Short-Term Copier — the only nationwide short-term copier and printer rental company in the U.S. — for $2.7m (sub-3x SDE) off a BizBuySell listing. The business generates ~$4m in revenue and roughly $1m SDE, serving law firms in litigation war rooms, event/conference organizers, film productions, FEMA, and U.S. embassies from a lean network of self-storage-unit outposts staffed by one person and a van per city. Tim's central thesis was the parallel to Zagster: nationwide remote operations, dominant niche positioning with no real national competitor, strong repeat customers, and enormous untapped sales and marketing potential after a decade of zero outbound effort. He runs the business entirely from Puerto Rico with a former Zagster colleague as his on-the-ground operations manager, and has set a public goal of doubling revenue within three years by building outbound sales, improving the website and direct-booking channel, expanding into construction and new equipment categories, and formalizing the company's positioning as a 'temporary office' provider rather than just a copier renter. He has also launched the SMB Fund to help other searchers cover SBA down payments.

Deal facts

purchase price: $2.7m
multiple: less than 3x SDE
sde ebitda: SDE ~$1m (2022); listed at ~$700k, cash flow $830k
revenue: $4m (2022)
financing structure: SBA loan (implied); specific equity/seller note not stated
notes: Business listed on BizBuySell October 2022 at ~$700k SDE but ended 2022 over $1m EBITDA. Covid cut revenue ~50% in 2020-2021 vs 2019 levels; 2022 was best year ever. Tim was on track to beat 2022 in 2023 despite only owning it half the year.

Why this business

Tim saw strong parallels to his prior company Zagster: Short-Term Copier operates out of self-storage units around the country with lean local teams, is the largest and only nationwide company owning its own equipment in the niche, and has significant untapped sales and marketing upside. He was drawn to its nationwide footprint, remote-first operations, recurring repeat customers, and the pricing power of being the dominant player in a niche with no real national competitors.

What's working

Dominant SEO presence — searching 'short-term copier rental' plus any U.S. city returns the business as #1-3 on Google with no active marketing effort
Nationwide scale creates a moat: large customers prefer one vendor across multiple cities, and equipment procurement advantages over smaller rivals
Covid killed off smaller local competitors who were doing short-term rentals as a side business, making 2022 the company's best year ever
Operations already remote-first, matching Tim's operating model from Puerto Rico
Seller provided an excellent transition, running the business as normal for the first 30 days post-close
Diverse customer base including major law firms (50% of revenue), event/conference work, film/TV productions, FEMA, and U.S. embassies
Partner network in cities that can't support full-time staff provides coverage and surge capacity without fixed overhead
Tim brought on a former Zagster operations manager to run day-to-day, freeing him for sales and growth

What's hard

No technology infrastructure in place — drivers communicate via text, email, and PDFs; implementing an event-management ERP is a first priority
Revenue is almost entirely job/project-based with no formal recurring contracts, creating unpredictability
Single-person-and-van model in most cities means limited redundancy if someone quits
The copier/printer industry carries a perception of decline that created skepticism during search and likely suppressed the multiple
Business had done essentially no outbound sales in a decade, so the growth infrastructure needs to be built from scratch

Notable quotes

I'm gonna make more at short-term copier in the first 12 months of operating this business than I did probably in three years the last three years of operating Zagster. I mean at the end of the day, when you raise that much money — 40 million venture capital — you're an employee of the company, you have no control over your salary.

Boring is the new sexy in my opinion. I think it's the new opportunity, and I think that to me the ETA space today feels like the venture capital space in 2007, 2008, 2009 — sort of the early days.

I believe within three years I could easily double this business.

When you take a step back, our customer is somebody who needs a temporary office — and that office could be at an event or a conference space, it could be a construction trailer, it could be a movie set. But essentially it's a temporary office, and so there's lots of other things other than printers that you need in a temporary office.