Congrats private equity is coming for your local plumbers, electricians etc

[Anonymous]

Are Inova and Medstar considered PE? They should be.

[Anonymous]

We should be happy they are not yet deported to some labor camp in Greenland, also run by PE, lol. Immigrants and brown people are first, but it's just a matter of time before JD and s miller will ship off ones deemed not american enough. 💩

[Anonymous]

Anonymous wrote:And physical therapists and dentists.

Dentists, man.

[Anonymous]

Remember this when anyone says it’s a good idea to go into the trades. Skilled tradespeople are turning into “techs” and under enormous pressure to make sales.

I had one tech from Snell straight up lie to my face with fake pictures and faulty readings to try to sell me a new system - and I learned from talking to my neighbors that I wasn’t alone. How do I know it was fake? Two second opinions confirmed the guy was full of shit.

I’m sensitive to people wanting to retire with something to show for it but man it would be nice if they didn’t always sell their practices, homes, etc to people who are determined to rip the next generations off because it was easier.

[Anonymous]

I'm a second generation HVAC contractor; basically all of our competitors that had any size have cashed out in the last 5 years. This isn't the first time our industry went down this road. Groups of "consolidators" went around trying to strategically buy companies to create national brands in the late 90s. The strategy didn't work and I know a handful of local owners who sold and then bought their companies back for pennies on the dollar.

This time around its all about squeezing as much sales growth as possible. The playbook is to turn service techs who traditionally fixed things into sales people; and then high pressure selling replacement systems at astronomical prices. Its a terrible plan for long-term success because once you finish fleecing loyal customers and killing the goodwill that existed in the original business the wheels fall off. All of the PE shops funding these acquisitions have short term horizons; someone's going to be left holding the bag when there's nothing left to squeeze.

The flip side for us is all positive. Whenever someone gets bought I start getting calls from long term techs that aren't interested in selling and want to make a move; the customers soon follow. I cut a $300K/ year marketing budget to $24K and still turn work away. Having former used car salesmen run around quoting crazy prices for installs makes life easy for my estimators. Margins and close rates are all up.

I don't begrudge anyone who has sold out. Working in people's homes is tough; home service business are historically high expense/ low margin operations. Depending on what data you use we either rank equal to or just below restaurants in failure rate. Personally I've never been able to get over what happens to my employees and customers to stomach even entertaining offers. I can live with accidently running the business into the ground on my own. I can't walk away and watch someone else knowingly do it.

[Anonymous]

Anonymous wrote:This feels so hopeless. What's the answer? Government intervention?

Welcome to late-stage capitalism.

There’s no answer. Every society has its rise and fall. We are no different and we’ve just started the descent.

[Anonymous]

I follow people, not businesses. I make a note of the competent technicians and ask for them specifically. If they leave, I have their cell to find out where they went. My plumbers are independent.

[Anonymous]

Anonymous wrote:We should be happy they are not yet deported to some labor camp in Greenland, also run by PE, lol. Immigrants and brown people are first, but it's just a matter of time before JD and s miller will ship off ones deemed not american enough. 💩

Greenland is too far away. There is plenty of unused government land to build internment camps to house our citizens.

[Anonymous]

Anonymous wrote:SavATree was bought by private equity before 2020 and stayed ok but then got bought again around 2021. They now are all hat and no cattle, their "arborists" are just salespeople, and they are imo con artists for anything other than trimming, cutting, etc.

I called them for a quote, $2k to trim a tree, that’s when I started googling who owns what, it’s shocking just how many of these companies are PE owned.

I kept googling until I found a family owned business, $400, unbelievable

[Anonymous]

Anonymous wrote:PE is coming for youth sports too.

I can see this. Easy targets. Parents will pay anything if they are promised miracle results.

[Anonymous]

Anonymous wrote:

Anonymous wrote:SavATree was bought by private equity before 2020 and stayed ok but then got bought again around 2021. They now are all hat and no cattle, their "arborists" are just salespeople, and they are imo con artists for anything other than trimming, cutting, etc.

I called them for a quote, $2k to trim a tree, that’s when I started googling who owns what, it’s shocking just how many of these companies are PE owned.

I kept googling until I found a family owned business, $400, unbelievable

How did you find out who owns the businesses? Whenever I tried it was very hard to tell.

[Anonymous]

Parents, don’t push PE as a career goal!

[Anonymous]

Got 2 tree quotes recently. Both from big regional/national well-known firms. One quote was over 4x more expensive than the other quote.

[Anonymous]

That's why plumbers HVAC and similar trades no longer try to fix anything. They don't even know how. They just sell you new stuff. I hired a company called Crawl Space Brothers which was trying to get into the DC market. Total disaster. They had just been bought by PE company.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sometimes these places go out of business because PE can’t give us what we want.

In my town, PE bought a small chain of previously family owned liquor stores. The stores were successful and the owners were committed to the community and believed in their products. They hosted events, welcomed wine clubs, brought in speakers, etc.

PE did none of that and had no interest in the product. The whole chain is now going out of business just three years later.

Story as old as time. This is a fake bankruptcy after they forced them to take on debt they could afford.

Yeah,
This is like buying used car by using bank loans and dismantling the car and selling the parts for more total profit.
Leverage buyout.