Acquisitions Anonymous - #1 for business buying, selling and operating - Anchorage’s Best Kept Secret: A Snow Biz with 40% Margins

Episode Date: May 27, 2025

Would you move to Alaska to own a snow removal business making $700K a year?Business Listing – https://www.bizquest.com/business-for-sale/landscaping-and-snow-removal-company-for-sale-in-south-central-alaska/BW2313996/📈 Big thanks to our sponsors!👉 Capital Pad is the game-changing marketplace connecting acquisition entrepreneurs with capital. Whether you're buying a business or investing in one, visit capitalpad.com to get started.👉 Interested in franchising? Connor Gross is the go-to expert. Join his newsletter or attend a workshop to find the right franchise for you: connorgroce.comCTAs:Website: https://www.acquanon.com/Twitter: https://twitter.com/acquanon✉️ Subscribe to our Newsletter and get more deals like this every week: https://www.acquanon.com/newsletter🔔 Subscribe to Acquisitions Anonymous: https://www.youtube.com/@AcquisitionsAnonymousPodcast?sub_confirmation=1🎧 Listen to our full episodes on your favorite podcast platforms: https://www.acquanon.com/episodesIn this episode, Michael, Heather, and Bill dig into a unique opportunity to own a long-standing snow removal and landscaping business in South-central Alaska. With reported SDE of $705,000 and a 17-year operating history, the business serves both residential and commercial clients in one of the snowiest regions in the U.S. The hosts examine everything from potential moats and operational challenges to community ties and the feasibility of SBA financing. If you’ve ever dreamed of running a simple but profitable service business in a remote and rugged location, this one’s for you.🔑 Key Highlights:- Business is making $705K in seller discretionary earnings (SDE)- Located in Southcentral Alaska, possibly Anchorage- 17 years in operation with a strong reputation- Five employees and a lean, high-margin operation- Challenges for outsiders entering a tightly knit community- Potential for carve-out complications in financials- SBA financing could be viable depending on buyer profile- Lifestyle considerations of living and working in AlaskaSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Maybe that's part of the moat is that this owner is part of the fabric of the community. And it might be hard for someone who is not that to buy it. There's a lot to think is going to be very geographically positive for this area, even though the population is going down a bit. If you can affect this transaction, take over without pissing people off and appearing like an outsider, probably a great life. I mean, you're making 700 grand at Anchorage, Alaska. You are rolling.

Hello, another episode of Acquisition, The Anonymous. We don't have 100% beer anymore. And thumbs downing on just the plus in January alone. Welcome to Acquisitions Anonymous Internet's number one podcast about buying and selling small businesses. Today, myself, Michael, and Heather went through a deal up in Alaska where we took a look at a snow removal business. So very excited about it. And I think you'll be surprised how we felt about this one. So stick around and enjoy the episode.

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I would just be quiet to see if anybody else was going first. Are we not speaking? Wait, are we recording a podcast? Well, I mean, so I have a big personality on these things. So I just usually have the one that starts talking without asking anybody. And I was like, well, you don't know what to do. I'm just going to shut up and see who talks. Then we didn't know what to do. We were scared.

So I currently start talking again. Michael, you got to like see the conversation and then walk away. Like you usually do. Drop a bomb and step back. So one, a fascinating thing that's happy to me right now is YouTube is convinced that I think that skiing season, snow skiing season, season ended too soon because it's still showing me like a ton of videos from snow and skiing. So I picked a deal that's kind of related to snow. But we'll come back to that after the chit chat part of the podcast.

I, okay. Well, I am currently planning several ski trips right now. So I am fired up for this. All right. What are we doing? Yeah, hook, hook brother up. How desperate. I have what I need.

But unfortunately, Michael missed your ski trip for like two years in a row now. I'm afraid my invite has expired. No, no. We'll get you hooked up. Yeah. So, no, what I just need, though, is when I get invited to stuff, if you do want me to come, I just need like a good excuse. Like, it's got to be like a once in a lifetime trip or it's got to be like, hey, you know,

so-and-so just is changing their life. So I really should do this a special time. They're turning 50. So, and then actually one of my buddies figured out this trip and has been telling our wives that I've turned 50 for three years in a row. And it's worked out terrifically because he's just the type of guy that you would think can't count count count count. And so it comes into a good excuse to allow us to leave our family and go skiing as as guys. All right. Tell me about this deal, Michael. I want to know about it.

It's the worst intro ever. You told me this is a deal that sells ice to Eskimos. Yeah. Is that what you said it was? It is a, I brought this. It is a landscaping and snow removal company for sale in south central alaska uh askey price is 1.83 million cash flow is seven hundred five thousand dollars and that is sde sellers discretionary earnings they don't disclose any other stuff in terms of gross revenue inventory and stuff like that the 2024 numbers just completed boasting a seven hundred and five thousand dollar earnings in sTE for the owner of the snow removal company you could take advantage of this opportunity to own a well-established landscaping and snow removal company with a loyal customer base and a strong reputation in the

community. This business has been serving residential and customer and commercial clients for over 17 years combining quality service with dependable operations. Please fill and send attached NDA, Alaska Real Estate Commission, Consumer Disclosure to Teams at Denali Business.com. The company has five employees, several opportunities for growth, expanding into other service areas. They lease their land and real estate. The owner is retiring and the seller is willing to stay on a provides smooth transition to a new owner, help with estimating, et cetera. And that's about it. They have a listing here of the NDA and stuff like that.

They want you to fill out. And it's listed by Kaden Van. How do you pronounce that, Heather? Sendak? The Sendak? Yeah. Who's located, I guess, in Anchorage in Denali business providers. Yeah, he's got a bunch of other Alaska businesses for sale.

Yeah, talk about a moat. Like, what do you do? I'm the only business broker in Alaska. Right. Wow. Okay. So this is literally a snow removal business in Alaska. It's been around for 17 years and every 10 minutes, you're needed again in Alaska.

I mean, is this a great business or what? There is actually a famous, a pretty famous ski resort called Aliaska, Aliaska, which is located 40 miles outside of Anchorage, basically at sea level. But they routinely get like four and, 500 inches of snow. To put that in perspective, like a Midwest ski resort, like a Michigan or something like that, would be happy to get high double digits. And these guys will get four or 500 inches, just absolutely.

How about like a, you know, Vail or Breckenridge like Colorado resort? I've heard numbers like in the couple of hundreds. And then the Utah like Cottonwood Valley does really good like Altos no bird, that kind of stuff. They'll push 300 and that sort of thing. Okay. So that's 300. so 500 in Alaska. So suffice to say, it snows a lot.

It snows a lot. And it does look like Heather, they have a picture of one of their trucks. This actually looks like one of their trucks operating being like an F-250 with a snowplow on the front. And I know you have one of those in Southern California. Oh, yeah. We can't even drive when it rains. We all stay inside.

And then a rain, water, standing water removal company in Southern Florida. It's so, so. So this is snowplow in 11 months of year, mow the grass one month a year. Is that what this business is, landscaping and snow removal company? That's what I would think. Not much landscaping, mostly snow removal. Obviously, it would be very interesting to see their 12-month monthly financial statements spread out, you know, how much of the revenue comes in, you know, four or five months of the year when it's snowing.

And then probably not much the rest of the time is my guess. I mean, maybe like if you've ever lived in a place where it snows, you need a lot of landscaping when the snow clears away, right? Because all the, you know, all the melt and the water and the runoff and, you know, sometimes you've even got to like regrade stuff. So if you're doing snow removal, that, especially if it's commercial contracts, which it says they have commercial contracts and residential contracts. You know, commercial snow removal contracts like come plow on my parking lot every other day or every day. in 10 months a year in Alaska, that's a good contract. Steady work, yeah. And then maybe you just get to take two weeks off or two months off or whatever in the summer.

And then you have great work 10 months a year. But what I noticed is it's five employees and a million eight in revenue. So I guess then we're talking about four of them in a truck, most of the winter, driving, you know, plowing the snow, right? I mean, that's a lot of revenue for five people. Yeah. But like they're even though margins are 40%. Yeah.

They're making 700K on 1.8 million in sales because they have no cogs. I mean, it's gasoline. Like that's it. And labor. And probably no competition or very little. You know, they probably sort of own their service territory and that's it. So that's the thing that I question, though, because in Alaska, not only does everybody have an F250, everybody has a snowplow attachment from the front.

So like, you know, how do you, what is the moat? I mean, it's been around for 17 years, right? So clearly there is one, right? Like, I really would want to understand why they get calls. So you think everybody has a snowplow? And you're just exaggerating a bit by saying, you think. I'm metaphorically, right? I mean, like, snow plows per capita, Alaska's got to be pretty high up there.

Right? That's like cowboy hats per capita in Texas. Yeah. So you're worried that somebody like this, they, are getting undercut from the bottom by, you know, Jimmy with some flyers and a truck who is coming in and being like... I would be. I would be if this thing weren't 17 years old. The fact that it's 17 years old tells me there is some sort of dynamic that creates a need for this business and that Jimmy with a snowplow can't do it or won't do it or is entrusted to do it or whatever. And that would be a major diligence point for me to understand how they can carve out margins this good. over 17 years in a place where it's got to be the highest snowplows per capita in the world. Yeah.

When I've been in Colorado, I've watched these snowplow guys and it'll snow. And they'll come in and it's a truck that is like this one we see on the screen, an F-250 or 2,500 RAM, something like that. And they'll come in and they'll go from our neighborhood where we're staying to the next one over, to the next one over, to the next one over. So I think there's economies of whatever, I mean, the equivalent of the economies of scale they get by doing five jobs at once that give you a huge cost advantage versus, you know, Jimmy with his truck who has two, you know, two customers that are spread way out. So it wouldn't surprise me if something like this gets kind of basically that kind of network effect of having a bunch of clients all in a row together and they go knock them all out. And then I think the second thing that's really important about this is reliability. because if it snows a foot, you want to make sure that whoever shows up, or are supposed to show up, they show up and help you get out of your house.

I mean, you're right, Michael, in that, like, these guys might have density economies of scale, but the one thing that I know about, you know, Jimmy with the truck across any industry, right, is that Jimmy usually doesn't understand his margins and thinks his truck is free to operate. And that's why Jimmy, where the truck always undercuts you. And you would think that Jimmy with a truck doesn't understand that he doesn't have density and he's got to drive 20 minutes each way and he's burning gas and all this stuff. He doesn't usually. And that's why he still undercuts you. But still, like they're continually beating out Jimmy with a truck who doesn't understand his own margins and capturing 40% margins. There's got to be a reason.

I mean, maybe it is the reliability. Like you said, maybe it's reliability. Maybe it's long term contracts. I don't know. Maybe they have some specialized equipment that Jimmy doesn't have. Heather, do I have to move to Alaska to own this business? I think you do. I think you need to be part of the local community.

That's maybe the scary part about this business. It has been there a long time, and you can imagine a place like Alaska. Everybody knows everybody. I also think it would be a little bit of a risk to be an outsider buying this. You know, someone who buys it from within the community can probably maintain the relationships and you feel pretty good about that. But if you're going to move from San Antonio to Alaska, which I'm, I know you're thinking about doing.

To own this business, I think that that could be a little scary in that you're an outsider in a place like this. And this is a relationship business, most likely. That maybe is the moat. We don't know. Maybe that's part of the moat is that this owner is part of the fabric of the community. And it might be hard for someone who is not that to buy it. Hey, everybody.

If you've listened to the show, you've probably heard us talk about franchises. While franchises can be a great path to business ownership for the right person. Like, there's a lot of pitfalls. And it's important to be really careful as there are certainly good franchises to be in and bad franchises that you don't want to be in. Connor gross is a friend of the pod and a resident expert on franchises. And Connor not only owns and operates his portfolio of multiple franchises, but he's also a franchise consultant and helps others work through while picking the right franchise for them. So as he's sponsoring today's episode, everyone should totally click in the show notes below to join Connor's newsletter and attend one of his gateway to

franchise ownership workshops. If you're ready to move and move quickly, schedule a call with Connor and his team today. I think that would be very tough. I think you're right, Heather. I think last time I looked at Anchorage is 250,000 people and there's 750,000 people or something like that in Alaska. Yeah. So this business is listed as South Central Alaska, which is Anchorage. I had to look at a map, but Anchorage is in South Central Alaska, but it's not listed as Anchorage. And I have to point out the irony of the snow, the picture of the snow, and it says hot listing. I just have to. Holy crap, Anchorage is shrinking. I would have, I would not have imagined that. That is interesting. 286,000 people. I mean, there is, there is, Alaska is sort of like

Canada. I mean, what's the total percentage of, or the total population of Alaska? I bet 98% of the population is in Anchorage. I think it's 700, yeah, it's 740,000. What I told you before was right. I just looked it up. Okay. So probably 30 to 40% of the population is in Anchorage? The MSA for Anchorage is 340,000 people.

So 40%. Yeah. The whole state is in Anchorage. Okay. Yeah. I mean, I think this business, I mean, it's probably not going to grow, right? Alaska is as snowy as it's ever going to be. And it's probably, you know, as populated as is ever going to be.

I don't know another 100 years of global warning, but none of us will be around for that. So this is a stable, you know, you're not going to triple this business, I don't think. You can't even do that the standard will expand to adjacent geographies because there aren't any, because you're super rural here. So like this business is the business is the business. And if you can affect this transaction, take over without pissing people off and appearing like an outsider, it's probably a great life. I mean, you're making $700,000.

in Anchorage, Alaska, you are rolling, I think. Yeah. Well, I think there's a hidden cost to this business we should talk about. And a senior person I knew used to refer to it as the Key West effect. And the Key West effect is he described it as there are a certain group of people who just keep traveling and then they can't travel any further and then they just stop at that place. And so Key West is a place where somebody just kept going south and eventually they got to Key West, there was water and they're like, okay, cool, I'm going to live here. And that's how you end up with places like Key West, Orange County.

It's kind of like the ends of the earth syndrome. It's like, you know, who are you going to find at the end of the earth? Like just to be out there, you've got to be a little different. Yeah, I've worked on loans that were in Alaska. Not very often. It's pretty rare. But even getting a hold of the lawyer, like, you know, what we're used to tapping away at our keyboard and lawyers getting right back to us, no, it might be three days.

You know, they were out, you know, on some track or they were doing something outside. And it was three days. and then you hear from them. And that was kind of the regular cadence of things. It all just, everything's a little different there. Life is different there. They were out hunting polar bears.

Probably. I don't know. Man, what a fascinating business. How much revenue do we think they're actually doing? The $700,000 in cash flow, like doing a million a half in revenue? I mean, it can't be much more. I mean, there's no cog.

It's cogs in labor, right? So you got five people. I mean, how much you're going to, these guys are going to make, to drive a truck, you know. I have a thought. I have a thought about why nothing else is disclosed besides the cash flow. A lot of times these businesses are the same person owns three or four different services

in the same area. And they might be all wrapped up under one set of financials or tax return. And you don't, it's like a carve out. You may not have separate financials that are clean just for this business. It may be part of, you know, I've seen that in places like this. where they own this and they've got some other business that's going more in the summer. And it's all in the same tax return. And it's very hard to figure out what you're actually getting cash flow-wise.

That being said, carve-outs now SBA financeable, right? Under the new SOP. Under the new SOP, that is the one piece of good news that we got in that whole thing, is that you could, the lender, the bank is now allowed to look at CPA prepared or reviewed financial statements in lieu of a tax return in a case like a carve-out for some other reason that there's not a standalone business tax return. So that is, you could do an SBA loan potentially on this, but even when you do carve outs and SBA allows it,

it's really hard to know whether the expense side is right. A lot of times you can validate the income side a lot easier than you can, the actual expense side. So they're still kind of risky to buy. Have you guys ever been to Marfa in Texas? Are you familiar with this? This is like the weirdest part of Texas, right? Yeah, it's this out in middle nowhere.

and it's this like 2,000 person town that once a year like all of Hollywood empties out into Marfa. So you would find like Matthew McConaughey and folks like that just kind of like walking around and hanging out for a couple weeks here when they'd have a film festival and stuff like that. But it's this like super weird place that became hip because the this famous artist from New York back in the 60s wanted to get away from everything so he could just create. So he just picked the furthest away from everything place he could find. And it was this place out in Big Ben called Marfa. Anyway, the reason I bring it up is, you know, this, what you're talking about, where one person has like six different small businesses and a little tiny town is exactly the way Marfa shakes out.

And they call it the Marfa hustle where whether you're an employee or you're a business owner, like you're the guy that owns the sandwich shop, the insurance brokerage and like the snow plowing thing. It's Texas and I have snow plowing. But you see what I'm saying? Like, you're just, it's kind of like, it's kind of like evolution. Like you just like you evolve to fill all these niches. And sometimes it's just one guy has to fill every single niche. And you look up and it's like, oh, that's Jib's business.

And the same happens for employees. And you'll see people that are like a yoga teacher, the reporter and like an EMT. And like those are their jobs. And they do each of them for 12 hours a week. And that guy who owns the six different businesses also is often the mayor. You know, he's like, the king of the town, which in some ways is pretty romantic, isn't it? Like, doesn't that sound kind of great?

You capturing 40% of the GDP of your hometown and just, you know, be just, just you, your tentacles are in everything. Yeah. Pretty much. And you know what? I will point out one other thing. It says cash flow, $705,000. It's entirely possible.

That could just be revenue. That is true. That is a good point, Heather. That is not, you know, because we have nothing else to go by. We only have five employees. And I, I was mistaking that. asking price for revenue earlier. Sorry about that.

But yeah, $705,000 cash flow. That's the only financial metric they're giving us. That might just be gross revenue. That happens a ton. I'm hopeful that's not what's going on here because the first sentence does say 2024 numbers just completed in end of April, boasting 705 of SDE. So Kaden from Denali business brokers seems to know what SDE is, which is good. Okay.

I didn't catch that sentence so it could be. but I am remembering a post by Clint Fiore this week where he pointed out that a lot of times the number that you get on biz by sell and the cash flow item could be anything. It could be SDE, could be EBITDA, could be adjusted EBITDA, or it could be random. Well, it's all made up until you do the QOE, right? That's true. That's true. Is this business SBA financeable, Heather?

Let's assume it's not a carve-out. I mean, let's assume this is a real snow-lying business in Alaska. probably owns a couple trucks, five employees, 17 years old, 700K of SDE. Can I buy this with an SBA loan? Yeah, you could. And I mean, the STE could probably get shrunk a few ways. And one of them might be maintenance cap X on those trucks. You know, the lender's going to hit you for that.

But yeah, there's enough cash flow here if it's the right buyer. I think this is one where the lenders would get really worried about the right buyer. You know, again, moving from San Antonio to Alaska, probably not the right buyer in the lender's mind, but if you're already local or you have some other tie-in to the community already, you know, that's the kind of thing that the lenders would would scrutinize here that's not really in the numbers, more of a, you know, soft analysis. I like it if you feel like you can plausibly live in Alaska and credibly be part of this community. I mean, this is like a bond. Like you can pay the right price and keep clear in snow for another 17 years and do great. Yeah. It's not going to be,

it's not going to stop being cold in Alaska. I like that. like it. I mean, this is, this is as stable as it gets, I think. Yeah. I think there's a lot of tailwinds potentially to with Alaska and specifically Anchorage where it's located. Like, you know, Anchorage, I don't know if you guys know this, but Anchorage was actually one of the busiest airports in the world for a period of time because prior to jets being able to make the trip nonstop from the United States and North America to Asia, they had to stop and they were all stopping in Anchorage. And then a lot of them were also stopping during the time of the Soviet Union. They would stop in Anchorage because you couldn't make the trip

because the Soviets wouldn't let you fly over from Europe to, say, Hong Kong. So you had to stop in Anchorage. And so I think potentially Anchorage and Alaska, like there's a lot to think is going to be very geographically positive for this area, even though the population is going down a bit. I'm into it. If you want to live in Alaska, I'm into it. I'm cool, except for the part where you got to live in Alaska. Some people really like snow and are also searchers.

So if you're from Alaska and you're a searcher, here you go on a silver bladder. I had a searcher that was looking at specifically at deals in Alaska. So that was a couple years ago. I'm not sure if he ended up there or not. But he was intent on it. Well, maybe he's ready for another one. Maybe he's ready for an ad on. Maybe.

I love this one. Cool. That's a cool one. All right. We'll put the link to the deal in the notes below. And if you do take a look at this. and let us know, we'd be curious. Or let us snow.

Let us snow. All right, dad. We're done. Put the mic down, dad. You're done. We'll see you guys next week. On the next episode of Acquisitions Anonymous.