THE DANGER OF MARKET TIMING THE SALE OF YOUR BUSINESS

The garage door industry isn’t the most obvious place for a business empire. Yet in just a few years, Guild has emerged as a dominant force, consolidating a fragmented market into a scalable platform worth millions. If you’re a business owner in a fragmented industry, Guild’s story raises two pressing questions: Could my industry be next for a roll-up, and if it is, should I lead the charge or sell to someone else? The roll-up model—acquiring and integrating small businesses in a fragmented market to create economies of scale—isn’t new, but its reach has expanded. From veterinary clinics to plumbing companies, private equity firms are creating billion-dollar platforms from businesses once considered too small to attract institutional capital. Roll-ups are like waves. Catch one early, and you can ride it to a lucrative exit. Private equity firms often pay a premium to consolidate a market, and the scarcity of scaled businesses drives multiples higher. Wait too long, however, and the wave dissipates. You’re left competing with a PE-backed giant with better pricing, marketing budgets, and scale. Timing is everything. How to Know if Your Industry Is Ripe for a Roll-Up When Guild co-founders Jordan Dubin, Joe Delaney, and Sean Slavzic set out to create a roll-up platform, they didn’t stumble into garage doors—they chose it methodically. Their approach offers a roadmap for owners wondering if their market is next. Fragmentation The more small, independent businesses in your market, the easier it is to consolidate. In the garage door industry, 92% of operators were small, local businesses—an ideal setup for Guild. Market Size A fragmented market needs to be large enough to justify consolidation. Guild found a $14 billion residential garage door market with plenty of room to scale. Growth Potential Growing markets attract investors. Garage doors were growing at 7–8% annually, compared to 3–4% for more saturated sectors like HVAC. Precedent Transactions A notable sale in your industry can validate its attractiveness. The sale of A1 Garage Doors to CoreTech at 21 times EBITDA signaled strong demand for scaled players. Scalability Industries with standardized, repeatable processes are easier to integrate and scale. Garage door companies focus on repairs and installations, making them well suited for roll-ups. Timing By the time Guild entered, private equity had already saturated HVAC and plumbing, leaving fewer opportunities. Garage doors offered Guild the chance to be a first mover and capture value early. Should You Sell or Lead the Roll-Up? If your industry meets these criteria, you’re likely at a crossroads. Do you sell to a roll-up or lead one yourself? Both options have merit, but the best choice depends on your goals and appetite for growth. Selling to a Roll-Up Selling offers liquidity and the chance to step back. To maximize your exit: Focus on EBITDA. Build systems. Make your business less dependent on you. Clean up financials. Transparent books boost valuation. “Private equity doesn’t want to buy a job; they want to buy an asset,” says Dubin. Failing to position your business as turnkey could mean leaving money on the table. Leading the Roll-Up If you’re not ready to sell, consider consolidating your industry. By acquiring competitors, you can scale your business, increase its value, and become the dominant player in your market. Dubin and his partners raised $35 million to launch Guild. “There’s too much money in the world and not enough good opportunities,” he says. Starting a roll-up requires capital, operational expertise, and a clear vision, but it lets you control your industry’s future instead of waiting for someone else to define it. The Wave Won’t Wait Markets ripe for roll-ups don’t stay that way forever. Once private equity enters, competition drives valuations higher and makes acquisitions less attractive. Early movers capture the lion’s share of value, whether they’re selling or leading the charge.

Supplier risk can erode the value of your company. When a potential acquirer examines your business, they look for red flags. A major one: relying too heavily on a single supplier—whether that’s a sole raw material provider or a platform like Amazon that controls your primary sales channel. If that key supplier vanishes or changes terms, your profits might vanish as well. This risk often leads to lower valuations in the eyes of buyers. Why Supplier Risk Hurts Valuation Over-dependence on one supplier—or on a single selling channel—makes you vulnerable. Buyers don’t like gambling on a business that hinges on factors outside the owner’s control. If an online marketplace tweaks its algorithm or suspends your account, your revenue may plummet. Acquirers see this fragility and adjust their offer downward. Adi Gullia’s Diversification Example Entrepreneur Adi Gullia saw this firsthand. He built his beauty brand, Grace & Stella, on Amazon’s platform. At first, it looked like a goldmine—his foot-peeling mask soared to $100,000 in monthly sales within nine months. Yet Adi recognized the risk. He knew Amazon could change rules or restrict listings at any moment, putting his entire business at risk. Instead of waiting for that to happen, Adi expanded. He forged relationships with subscription box partners to reach new customers outside Amazon’s control. Next he launched his own ecommerce site, selling directly to consumers. Adi also ventured into retail, signing a major deal with Target. These partnerships allowed him to diversify his revenue streams and build a more resilient business. Retailers like Target appreciated Grace & Stella’s success on Amazon, which served as proof of demand. By reducing his dependence on any single channel, Adi created a business that acquirers found far more appealing. The Impact on Valuation When it came time to sell, Adi’s diversification efforts paid off. His company fetched a valuation of 5.8 times EBITDA—a significant premium over what a typical Amazon reseller might expect. Most Amazon-only brands are valued at three to four times EBITDA, reflecting the higher risks tied to their reliance on the platform. Buyers of Amazon-centric businesses worry about potential account suspensions, de-listings, or increased competition driving down margins. Adi’s diversified revenue streams mitigated these risks, making his business more stable and attractive to acquirers. Practical Steps to Lower Supplier Risk 1 . Add Channels: If you rely on one marketplace, consider starting your own ecommerce store. Test alternative platforms or retail partners. 2. Secure Multiple Suppliers: If raw materials come from one producer, find a backup or two. Even if your costs rise slightly, you’re buying peace of mind. 3. Build Direct Relationships: Capture customer data through your own site. Invest in ways to reach buyers directly—email, social media, subscriptions—so no single platform can cut you off from your audience. Conclusion Supplier risk is a value killer. Buyers pay less for a company balanced on a single weak pillar. Don’t let one supplier or one platform control your future. Take a page from Adi Gullia’s playbook. By branching out to retail with Target, leveraging subscription boxes, and launching an ecommerce site, he reduced his supplier risk. These moves not only stabilized his business but also helped him command a premium valuation. At 5.8 times EBITDA, Adi’s sale was far above the norm for Amazon resellers—proof that diversification strengthens both your business and its ultimate value.