Jesse Sunquist·October 16, 2023

How to Widen Your Search to Buy a Business | Jesse Sunquist Interview

Jesse Sunquist, a former corporate auditor/finance-and-deal-desk professional, quit his W2 job in August 2021 to search full-time for a business to buy, motivated primarily by family flexibility rather than wealth building. After a first LOI fell through and a second deal collapsed late in negotiation, and after lowering his SDE floor from $500-600k down to $300k to unlock deal flow in his geographically constrained search (within about an hour of his New Jersey home), he ended up buying a Mosquito Joe pest-control franchise resale doing just under $1 million in revenue -- an industry and format (franchise) he had never previously considered. Within weeks of closing he opportunistically acquired a second, neglected neighboring territory in Pennsylvania fully seller-financed, validating his roll-up thesis almost immediately. The episode covers his methodical franchise diligence (cold-calling other owners, using FDD data to estimate territory economics), practical operating improvements he made (remote route optimization, outsourced call answering), and candid reflections on the harder parts of ownership -- managing blue-collar staff who ask for loans, dealing with a seasonal labor cycle, disputes over service delivery, and second-guessing himself on how much he conceded to employees during the transition. He closes the loop on the psychological themes from his earlier viral essay about searcher self-doubt, reaffirming that his smaller deal size was the right choice given his actual goal of family flexibility.

Deal facts

sde ebitda: Just under $300k-mid $300s SDE (Jesse lowered his floor from $500-600k to $300k; territory revenue was just under $1 million)
revenue: Just under $1 million (first territory)
financing structure: Second, add-on territory (Bucks County, PA) acquired fully seller-financed roughly 6-8 weeks after closing the first deal, for a low price, from a distressed/absentee owner
notes: First territory closed between Christmas and New Year (delayed close); seller wanted to finish out the season before selling. Second territory was a poorly-managed, low-revenue (~$150k) add-on bought from an owner who was about to walk away and return it to the franchisor for nothing; deal was negotiated directly after Jesse found the prior owner's email correspondence in the inherited email account.

Why this business

Jesse searched full-time for about 14-16 months in a tightly geo-constrained radius (1 hour, later widened slightly, from his home in Monmouth County, NJ) and after a first LOI (a bookkeeping business) fell through and a second offer collapsed when the seller's accountant intervened, he lowered his SDE floor from $500-600k to $300k, which unlocked far more deal flow. A broker's email blast introduced him to a Mosquito Joe (pest/mosquito control) franchise resale. He had never considered franchises before, but after his own diligence -- cold-calling other multi-unit franchise owners in the network, reviewing the public FDD (franchise disclosure document) for territory economics, and confirming the target territory was a top-10% performer in the system -- he concluded it fit his need for immediate cash flow, had a credible franchisor (Mosquito Joe was owned by PE-backed Neighborly), simple operations, high gross margins, and a clear roll-up thesis of acquiring neighboring territories over time.

What's working

High customer retention and referrals as the number-one lead source, reducing reliance on paid ads
Franchise owner network functions as a peer-support 'cheat code' -- other Mosquito Joe owners share best practices freely since they aren't direct competitors
Responsive franchisor support (e.g., corporate turned around a plant-damage complaint investigation within two hours)
Roll-up thesis validated almost immediately: acquired a neighboring, mismanaged Bucks County, PA territory 6-8 weeks after closing, fully seller-financed, run out of the same office/garage
Operational tweaks he implemented himself: shifted nightly route-printing to be done remotely at night so routes lock in after all customer schedule changes, saving staff time; outsourced call answering to a US-based call center so every call is answered during business hours without needing another office hire
Seasonal structure lets him compress work to ~7-8 months and largely step back in the off-season to spend time with his kids
Business achieved flexibility goal (his actual why) even before major wealth accumulation -- e.g., he now picks his kids up from the school bus

What's hard

Low barriers to entry in pest control mean competitive/pricing pressure from underpriced local operators, though referral-driven customer base provides some moat
Non-contractual service model means customers frequently pause, skip, or dispute service ("were you guys even here?"), which he hadn't anticipated during diligence
Seasonal business requires laying off the entire technician workforce (~50-60% turnover) each off-season and managing cash flow across a compressed revenue period
Managing blue-collar hourly employees involves frequent requests for pay advances/loans, requiring him to develop ad hoc lending principles on the fly
Employees sometimes simply refuse instructions (a technician declined to redo a customer's service), which never happened in his corporate career
He felt he conceded too much (e.g., a raise) to a returning employee out of fear of losing them before ever having worked with them, and in hindsight should have pushed back more
Personal psychological hurdle: feeling embarrassed/comparing himself to peers who bought larger (~$700k SDE) businesses, despite believing the smaller deal fit his actual goals
Owning and managing people for the first time was the hardest part -- harder than the operational/systems side of the business

Notable quotes

I mean it's simple business right it's not an easy business but it's a simple business

I probably talked to like four or five on my own and then um they recommended one or two other ones

I feel like the franchise owners Network is such a freaking cheat code

before you buy a business with blue collar workers you should expect every single one of them to ask you for money