Roll-Up
Buy a BusinessA roll-up is the strategy of buying several small companies in the same industry — plumbing shops, HVAC contractors, landscaping firms — and merging them into one larger business. The individual pieces come in as bolt-ons; the combined company is the prize.
Why it creates value — “multiple arbitrage.” Small businesses sell for a low multiple of earnings (often 2–4×) because they’re risky, owner-dependent, and hard to finance. A single company doing several million in profit, with real management and clean books, sells for a higher multiple (say 6–10×) to private equity or a strategic buyer. Buy the small pieces cheap, combine them into something bigger and safer, and the same dollar of earnings is suddenly worth more. That gap is the roll-up’s engine.
Roll-ups live in the $1M–$10M revenue window: small enough to buy cheaply, combined into something big enough to sell up-market. The hard part is never the buying — it’s integrating multiple companies, systems, and teams without breaking what you paid for.
Full playbook: roll-ups and add-on acquisitions.