Acquisitions Anonymous - #1 for business buying, selling and operating - Would You Pay $6 Million for a Tent Rental Business?

Episode Date: August 11, 2026

In this episode the hosts talk about a 30-year-old Maryland tent rental business generating over $1.25M in annual EBITDA, debating whether its remarkable stability outweighs the risks of seasonality, asset maintenance, and a premium asking price.Business Listing – https://www.bizbuysell.com/business-opportunity/special-events-tent-rental-company-highly-profitable/2526933/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.Looking to build a professional website in minutes? Try Wix: https://wix.pxf.io/c/6898629/3115214/25616?trafcat=templateHubSpot is the backbone for how businesses scale without chaos. Try them out here: https://go.try-hubspot.com/OeG9VrSubscribe for more episodes: https://www.youtube.com/@AcquisitionsAnonymousPodcast?sub_confirmation=1Subscribe to our Newsletter: https://www.acquanon.com/newsletter💰 Sponsored by:Inzo TechnologiesWhen you acquire a business, you also inherit years of IT and cybersecurity risks. Enzo Technologies helps acquisition entrepreneurs uncover technology issues during due diligence and stabilize IT after closing with a buyer-operator perspective. Get a complimentary IT risk audit and 30-day action plan at https://enzotechnologies.io and mention Acquisitions Anonymous.Acquisition Lab, the leading community, platform, and fund backing serious acquisition entrepreneurs. The education and deal-search tools are free, and a real board of advisors will talk you out of a bad deal as fast as into a good one. There's no clock and no pressure. See what it's like: sit in on a free live roundtable at acquisitionlab.com/roundtables, and mention Acquisitions Anonymous!This week the hosts evaluate a 30-year-old tent rental company in Maryland producing approximately $2.9 million in annual revenue and $1.25 million in EBITDA, with an asking price of $6 million. Serving weddings, galas, corporate events, and recurring community functions, the business has reportedly maintained remarkably consistent financial performance for more than a decade despite operating in a highly seasonal industry.Key Highlights:- $2.9M revenue, $1.25M EBITDA, $6M asking price for a 30-year Maryland tent rental business.- Financing seasonal businesses requires careful timing, working capital planning, and lender confidence.- Long-term recurring relationships with venues, charities, and annual events create unusually sticky revenue.- Major diligence items include tent condition, replacement CapEx, asset utilization, and customer concentration.- Hosts like the business overall but believe the asking price is likely too high without additional upside.Subscribe to  weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking hereDo 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]

Hello, everyone, and welcome back to Acquisitions Anonymous. This is the Internet's number one podcast on buying, selling, and operating small businesses. I am one of your hosts, Bill D'Alessandro, and I was here today with Heather Anderson and Mills Snell, and we did a great business that I wanted to buy. It is a tent rental business in Maryland, has made north of a million dollars of EBITDA for 10 years, super stable, reasonably priced, and Heather actually had financed some business related to this, so she has some interesting insights on how you finance a somewhat seasonal business with heavy assets. So this was a fun one. I hope you enjoy this episode of Acquisitions Anonymous.

Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory line. When you close a deal, you inherit the cyber and IT problems that have been piling up for years. Inzo Technologies, that's I-N-Z-O. helps acquisition entrepreneurs evaluate technology risk during due diligence and manage cybersecurity, IT, and voice after close. CEO Nick Acres acquired Inzo and recently led the company through its first ad-on acquisition.

He brings a buyer-operator's perspective to what needs to be uncovered before the wire and stabilized once ownership changes hands. Enzo offers a complementary IT risk audit of your target company to help surface the biggest risks in plain English and deliver a 30-day plan to reduce exposure and lower the risk of downtime. Visit enzo Technologies.com slash ETA and mention Acquisitions Anonymous. That's I-N-ZO Technologies.com slash ETA. Welcome to Acquisitions Anonymous. We're laughing because Heather says she has some experience quasi-related to the deal we're doing today.

And I told her, well, you have five seconds to remember. And I hit record. So here we go. There's no pressure at all. Well, this is a good one, though. So this is a tent rental company. It says it is highly profitable and they do special events. I said, so I should share it for our folks on YouTube.

So you can actually see it on your screen. Tent rental. So this is a 30-year established special events tent rental business. It has 2.9 million in sales and 1.25 million in EBITDA. Heck of margins on this. It is in Maryland. and they are asking for $6 million. So is that a little under five times?

It says this business caters to the special events market, weddings, gala, corporate events, etc. It is very well regarded within the industry and it's consistently produced between 2.9 and 3.25 million per year in gross revenue over the last 10 years. The business is highly profitable, typically generates over $1.25 million in owner comp per year, and can easily expand if the new owner,

installs a marketing program and advertises its services. The current owner has owned the business for the last 30 plus years and is now set to retire. An owner-operator-buyer is preferred. The seller is willing to stay on for a three-to-six-month transition period. So we don't have a lot on this business, but it's a pretty straightforward business. They put up those, you know, nice, heavy-duty white tents at your wedding. Heather, tell us about the related experience you have. I remember something. So you gave me a little more than five seconds, and I did remember something. Usually these businesses have reoccurring revenue. They have reoccurring clients because basically there are events that are held every year by, you know, whoever it may be, the charity or the city or whatever is going on. So they have a lot of kind of standard events that they are the go-to tent provider for. And those are very sticky. As long as those events still happen, these guys will get. at the call. So there's probably a certain chunk of this 2.9 million of revenue that we could say is reoccurring, not contractually recurring, but reoccurring. So that's pretty good. And there'll be

another chunk that will be, you know, weddings and things that are just going to be happening once. And so the lack of marketing, you know, it would be nice. They probably could grow a little bit for those kind of one-time events. But it has a limit to it. You know, there's only so much, you know, so many events that are going to need these kinds of tents. And when I see that this is in Maryland, it reminds me of a different deal I did in that area for bounce house rentals. And that is, I learned, it's very seasonal there. You know, this is outdoor parties. And it gets cold, you know, at least half the year.

It's probably a little too cold to be having parties outside. So this is probably, you know, got a busy season that's about six months long. And then kind of a dormant season, most likely. that where nothing really happens. So that's interesting. So that would make it tough to debt finance generally, right? Correct. But at the same time,

the broker here says it's stable as heck for the last 10 years. So that's working in your favor. Which is really interesting in seasonality, despite COVID? Like, how did this business, I mean, maybe he's just rounding COVID kind of out of the thing. But the fact that this is,

I think this was probably, I think this crushed it in COVID. Yeah, that's what I was going to say. I saw another one. Yeah, you had to have outside events, I think. So I bet this was the right. COVID was great for this business. Yeah.

That's what I've seen that in other tent rental businesses. It's, it was actually, they had more events outside and, uh, they did do well. Uh, so it could have just been very stable. The problem with the seasonality is, is a couple things for financing. If you want to buy a business, it's got that kind of seasonality. You have two problems. One is when are you going to close? You can't just sign an LOI and race to the finish line and close as soon as possible

because you may land right in the middle of the, or the beginning, which would be the worst thing, of the slow season. And then the bank is going to go, wait a minute, I don't want to close this loan right now. You're not going to have cash flow for six months, so we're going to wait. So the bouncy house rental, actually that is what the buyer and seller did. They entered an LOI knowing that they needed to close in March. which would be just the beginning of the season, right, where cash flow was going to start again. But they sat on a signed LOI for, I think, like, four months.

Oh, wow. You know, because they wanted to start the loan process, and I had to tell them, no, that's not really going to work. You can't really start a loan process and then kind of sit it over on the shelf. It's going to turn into a mess. You kind of have to start the loan process and kind of finish it with the bank.

So we shouldn't start it until maybe January, if you want to close in March. And so that's what they sat on a signed LOI for, I think, three or four months. And then we started the loan process and then they closed at the beginning of the busy season. That's what you have to do with a company like this. So it's not that you can't get a loan, but that's your first problem. And your second problem is if you close in March, you've got to show the bank that you're getting enough or you're bringing in enough working capital to go through a nice busy season and end up with enough cash.

at the end of that, that you can make the payments during the dormant season, and that the bank is going to trust you that you can manage your cash that way. Will they make you do an escrow, or will they actually just trust you to manage it? I mean, you know, they're banks, so they would rather you do an escrow and some would make you do an escrow. They don't want to trust you for anything, is the real answer. But, you know, sometimes they'll trust you. If you, you know, this is a case where if you have a stronger personal net worth, personal liquidity, they might trust you more. If you don't, if your personal financial statements on the skinnier side, then maybe the only way you can do that is with some kind of an

escrow holdback. And anytime you have to get into weird things like an escrow holdback, a lot of banks will just say, I just don't, that's too much trouble for us. We just don't want to do it because it's outside the norm and it creates a lot of extra work. Yeah, that makes sense. One thing about this business that is interesting to me on the recurring side of things is, you know, for weddings, you're not necessarily having to go find every bride and get out in front of them. You just go build relationships with the venues where the venue says, hey, look, we're an indoor, outdoor venue. And if you want, you know, to expand your seating and you need a hundred more seats outside, you know, we'll handle, you know, putting you in touch with the

company or the venue itself will do it and mark it up to the bride or to the corporate event or whatever. I have a friend who owns a larger event venue space here in town and they just are kind of like, look, you have to use the chairperson that we say. You have to use the linen company or the caterer or whatever. So you could really add some potential leads and lead volume without having to go like pay for really expensive, you know, pay per click or, you're not doing B2C marketing. This is still B2B marketing even to get the brides, both both venues and wedding planners. Yeah. I do wonder, like once you figured out, you know, storage and installing these things and taking them down and all the logistics associated with that, it seems like it would not be

that difficult to kind of expand into another vertical like bouncy house or water slides or whatever because you've got to have a big box truck to move this stuff. You have to have a place to store it. You have to have people to take it up and put it down. Once you figure that out, it's not that hard to do it just with something slightly different. Yeah. That's a good point. And really the difference, the only thing you have to add is marketing if you're going to kind of pursue those kind of different types of parties or events. I think that's a good point. There is some maintenance CAP-X on these businesses because, you know, the tents do get worn out or ripped or whatever, and they do have to, you know, replace them. So I doubt that that's factored into this million

250 that they're talking about. They're also saying they call it net cash flow, but then down below they call it a million to an owner compensation. So it's also there's a problem with that because sometimes you've got to, it probably means it's a lot of adbacks. You know, like your whole million 250 is probably addbacks. Sellers, you know, car and sellers, health insurance and possibly even vacations or whatever else. But that's not the end of the world, right? I mean, that's, as long as this is kind of clear and you can see, oh, yeah, you're running

your F-250 through the business, like I can add that back, right? Yeah. Yeah, if it's a, there's some that you can add back. but it can get carried away. Like, you know, this is the kind of business where if the seller has just never paid any taxes because they've just run personal expenses through it, and it's really like the tax return looks like zero net income, and you've got the entire million 250 is made up of personal expense adbacks. Now you're in a territory where it gets pretty difficult to get a bank on board with.

There are limits to it. There are limits. Like, you can't go too far. And this is the kind of business where I often see that they have, gone a little too far. And they don't say SBA pre-qualified, which is always my hint. Thank you, Robert. Yeah, Robert, good job. It's my hint that maybe that's the case here. Perhaps. Or cash or something. Like, who knows? Or cash. Yeah. Buying a business might be the biggest financial decision of your life. And most people try to make it alone. Cold emailing brokers,

reading financials at midnight, and guessing what are the numbers actually hold up. Acquisition Lab exists so you don't have to. It's the leading community, platform, and fun backing, serious vetted acquisitions entrepreneurs with a standing board of advisors who've actually done this. People who will talk you out of a bad deal as fast as into a good one. The education and the deal search tools are free and open to everyone before anyone asks you for a dime. The easiest way to feel that is a roundtable. It's a free live conversation where you talk through what you're actually stuck on with other buyers and advisors who've been exactly there. Nothing recorded so it always stays in the room.

Sit in on the next one for free at AcquisitionLab.com slash roundtables and tell them that Acquisitions Anonymous sent you. They haven't said anything, and this is a very short synopsis of this business, but I wonder what the asset base is like. You know, the utilization here is going to be critical and also like how recent, you know, is their stock. Like if these are all old tents and they're dry rotting and like you've got tons of maintenance issues and you're looking at, okay, these tents cost 50 grand to buy new and we need 10 more. All of a sudden, the whole deal changes. I don't know that this is rocket science to figure out. Like, I don't think you have to be a huge insider to figure out. You can walk in their warehouse.

You can go to some events where they have things put up in due diligence and see like the quality. but it would be a real, it's all asset based. It's all kind of short-term rental of those assets. The quality is really going to matter for upcoming cap-ex. Yeah, I'd be really curious about kind of how these things wear out or don't. You know, it's not like, you know, they're tense. It's not like they're hard wearing, I wouldn't think. You know, people aren't walking on them or anything.

It's your staff putting them up and taking them down. So if your staff is, you know, probably going to be careful with them, maybe they last a long time, you know, which would be great. But you definitely have to diligence, you know, I'm sure they're fully depreciated from an accounting point of view. But how depreciated are they from a true usage point of view where you have to throw them away? If it rains, you've got mold issues too.

I think there's, you know, things that can happen definitely to this kind of stuff. Well, and how well has it been taken care of, right? To your point, Heather, like you put them away wet, they're going to get moldy. Yeah. If you manage that, maybe not. The thing that I found interesting is just how consistent this business has been between 2.9 and 3.2. million of revenue for 10 years straight and very, very stable, but then it says can easily expand if the new owner installs a marketing program and advertises its services. And this, of course,

is like the most common throwaway sentence in his broker, you know, language. But at the same time, it makes me go, are you trying to tell me that the owner of this business is so stupid that for 10 years, his business has been flat and it has never occurred to him to do any marketing or ever to advertise his services, you know, and maybe, I mean, possibly that this guy says, hey, 1.2 million is enough for me. That's fine. I'm just kind of on cruise control. But anytime I see that, I go, are you really telling me we've really never done any outcome? Like show, show me the 10 years of P&Ls with no expenses. Like, why haven't you done it? And if you haven't done it, how have you gotten this big? You know, and it's possible there is a giant,

gold nag line on the ground here, but it is rare, you know, small businesses don't say small on purpose, typically. So I really want to diligence that because, you know, we're sitting here having not even signed an NDA thinking a ways to grow this thing. Like, this didn't occur to the guy who owned the business for 10 years. You know, best answer that I have heard in response to that is one where they either kind of have like a limiting belief or there's some kind of constraint. where they're like, well, you know, Bob is my truck driver and he only wants to work four days a week.

And I just, it would be too hard. I don't want to hire another truck driver, you know, to move this stuff around. So like, I've just kind of been content where I'm at. Like, and I really run into situations like that where you go, but you could do X, Y, and Z. And as an outsider and a newcomer to this, like, it seems like really easy. And they're like, yeah, like, I just don't. It's a risk thing where they're just like I'm comfortable enough. and I don't necessarily want to take the risk.

Is there a reward? Absolutely. I just don't want to take the risk to do it. I don't want to risk buying another truck and hiring another truck driver. It's easy from the cheap seats where we are, but I've seen it tons of times. I know you all have two. Yeah.

Our tents are fully utilized. I would need another truck. Like there's like a step change of it needs $200,000 of cap X and another truck and another employee. And I'm like, I just don't want to do that. I'm making, I'm taking home one and a quarter, you know, on a good year. And I'm taking home a million, you know, on a bad year.

like I'm happy. Yeah, I see it a lot. I think it is a personality type and just a reluctance to reinvest. It kind of comes down to, but it will cost me money. That will create some risk. And yeah, I don't want to do it. And I think it's interesting this. There's a, there's a lot of small business owners who you think of them as risk takers because they are entrepreneurs, but they kind of reach a plateau where they become not risk takers. Yeah. You know, and they don't want to grow up for business. Yeah. Yeah.

You're comfortable. But I like this business. I mean, it's stable as heck. You know, this is sort of the type of thing you could buy, figure out pretty easily. And I hate to say the, you know, the cliche thing, you could have a general manager here. You know, I think you probably still got to live in Maryland, like near it. But I don't think you have, you're going to every event. Like, I would think you could, you could own this business pretty passively.

Sure. I wonder to if this, like, depending on where it is in Maryland, you would be able to discern this very quickly. But I wonder if they do a lot of like DC related work. You know, the typical like political fundraisers and like gala is like, it may be that like 100% of their business or 90% of their business is like attributed to politics. And that would tell you, okay, you know, maybe it is fairly steady in a way that corporate events aren't. weddings, you know, might ebb and flow. So the other would make me more nervous, Mills, because that would make me wonder, does the owner of this have some political connection?

Like, this is the type of thing that, you know, fence company or tent companies are roughly interchangeable, that the political administration changes and they start throwing the work to their buddy. Yeah. Yeah. You know, that would make me nervous. I like corporate events and weddings and stuff like that way better. The fact that they've been this stable makes me think that it's probably not that.

they would have like two year swings, right? Like political year, you know, election year, a lot's going on, down years, you know, revenue-wise. Heather, you had made a point about weather kind of being a limiting factor in seasonality. I think, though, that these businesses kind of thrive on like extending the season, right, and extending the use. So like here, it's super, super hot or it's very rainy and you have an outdoor wedding. You've got to get a tent, you know, up there. all the sudden you put heaters in a tent like this and now we can do something outside where we couldn't before. So I think it's elastic in that way, not perfectly elastic, but somewhat.

Yeah, maybe my slow season is not six months. Maybe it's only three or four. That's really too cool to be outside. That's a good point. And, you know, you said political, it could also be like nonprofits. You know, D.C. is an area where you have, and I've seen a lot of businesses where, where they cater to nonprofits of a certain ilk or another. And that's kind of their marketing niche.

So I think that's a really good question. What do all your customers have in common here? Are they mostly nonprofits or are they politically oriented or whatever? Is it relationship based with the seller? Because it really could be in this business based on where it is. Bill, do you remember like in the first 20 or 25 episodes of acquisitions anonymous. We looked at this marketing business that we were like, look at their revenue.

It's so weird because we had like, I think it was like 10 years worth of revenue or something. And the revenue like had these hard cycles, Heather, up and down. And it fell on election years. And it turned out, like they didn't, they didn't come right out and say it. But it was like niche marketing, consulting or something. I think they were maybe helping buy, uh, ad, you know, or media buyers for political. campaigns. And it was like, oh my goodness, their revenue cycles up and now and by like a factor of 10. Yeah, it's one thing to have a seasonal business like inter year. But it's totally different to have one on like a two year or four year cycle. I have I have worked with a ballot printing company.

Oh. You want to talk about crazy cycles. Yeah. And a lot of pressure. I had someone recently looking at one and I said, I would stay away from that. It is a lot of scroof me. Yeah, the scrutiny today is just keeps going higher and higher and it's a crazy business to be here. Yeah. Wow. Cool, though. So, I mean, the other thing that you could do, what I would be diligent saying, you kind of mentioned it earlier, Mills, what else can we rent? Like, the slam-dunk thing is to rent those, like, toilet trailers, like, not porta-potties, but like the nice ones. The nice having a wedding.

That type of stuff. There's so many other things. if you're already coming to the site with the truck, you know, tables, chairs, I mean, full, you change this from a tent rental to like a party rental. Yeah. Company and you can do all of it. But like if you're already in with all the venues and you can say,

hey, we just do it all. Again, it shocks me that the owner wouldn't have thought about this for 10 years, but that seems like a fairly straightforward expansion opportunity. The only risk to that, and I would be really curious to get this owner's take on it, is is it territorial enough that you don't want to step on some toes. And like, it may be the reason that this business gets, you know, in with certain places is that they're not going to step on anybody else's toes. Like, all we do is tents. You don't have to

worry about us taking your linen rental, right? Or your portopati rental, like, or whatever. Because from folks that I know in this space, it's very like, I don't know, cagey is not the right term, but certain places, it's like, if you're using our venue, you have to use our catering company. or you know, you have to rent your tables from us. We won't let you have somebody else bring them in because they, they can say like, hey, if you want your wedding here, like, it's a nice spot. You got to play by our rules. I wonder if doing that could potentially bite the hand that feeds you.

Yeah, it could be that the venues have kind of parceled out. Like they're throwing this bone to you on the tents. They're throwing this bone to these guys on the tables. Like, don't upset the, you know, the grave is right now. Yeah. Yeah. Let's bring this to a close. What do we think?

Thumbs up? Thumbs down. Mills. What do you think? I like it, but I think it's probably overpriced unless I find that, you know what? They actually have massive underutilization of the assets. And like you could, it's doing $2.9 million in revenue, but you have assets that could do $7 million in revenue and they're all new, you know, or relatively new. But it just feels like maybe a little bit overpriced at the $6 million.

asked to me. Yeah, that makes sense. Heather, what do you think? I would agree with that. I would say, like, I would probably sign the NDA and just find out two things really fast. Who are these customers and what percentage is reoccurring?

You know, do I feel stable enough there? And then I'd go to Mills's question, utilization. And if both of those were great answers, you know, I'd still think it's maybe a little overpriced, but, you know, there's room to probably negotiate and get it to a price I could agree to. but if those aren't great answers, then I'd probably walk away after that. What about you, Bill?

I really like it. I do think it's a little overpriced. I wonder, oftentimes we see these businesses and it's like, you have to pay for the business plus $2 million of tents or something. So I wonder if behind the scenes, that's what they've done. They put a 3x multiple in the business, which would make it worth, you know,

a $1,4 million bucks, and they've got $2 million bucks of FF&E tents, and that's how they got here. So I do think it's a little overpriced. I like the business a lot. You know, I would be signing the NDA, learning about the business, and not hitting the bid,

but that's totally fine. I can't buy this business because I don't live in Maryland. You know, it would scare me too much to do this. You cannot phone it in for this business. It's like due to why your manager could, you know, like get hit by a bus and the tenant still has to get delivered. Exactly.

Yeah. So I think you've got to be there. But I like it. I mean, I love how stable it is. I think it could be a great kind of cornerstone for like a local type holding company as well. All right.

That's a good one. This was a great one. Shout out to Gurdley Bot for finding this for us, even though the Gurley himself is not here. So if you like this episode, we have almost, geez, 600 more like it on ACQUanon.com on our website. They are organized by industry.

We have done a number of other equipment rental type businesses. I don't know if we ever done tents before, but other party rental and heavy equipment. rental. So if that's something you're into, asset rental, you can learn more about it on our website, a couple other episodes there. You can also get on our email list at the website, acqueu-u-anon.com. And we will email you the episodes with little summaries every week. In case you don't have time to listen to it on audio, we'll drop them in your inbox and then you can just listen to the ones that you think sound cool. So thank you for being with us today, and we will see you on the next

episode of Acquisitions Anonymous.