Deal Diary #1
What I Learned Reviewing a $5M Fire Safety Business
When you start looking for deals, you realize something fast — most people chase sexy industries.
Tech. AI. SaaS.
But the real money? It’s in the boring stuff that keeps the world running.
This week, I reviewed a $5M fire safety business, and it opened my eyes to a quiet goldmine.
Let me break down what I learned.
1️⃣ The Industry Is Boring — and That’s Beautiful.
No one’s bragging about owning a fire extinguisher company on Instagram.
That’s exactly why it’s profitable.
Fire safety is one of those non-discretionary industries — people don’t buy it because they want to, they buy it because they have to.
That means recurring revenue, long-term contracts, and high retention.
When you find a business that’s mandated by law, you’ve found an income stream that doesn’t flinch during recessions.
As Ogilvy would’ve said: “Where people must buy, you must sell.”
2️⃣ The Margins Are Fire-Proof.
Most service businesses hover around 10–15% margins.
This one? 25–30%.
Why?
Because the customers aren’t price shopping — they’re compliance shopping.
And once they trust you, they stay for years.
The work isn’t glamorous — inspections, extinguishers, sprinklers, alarms — but the economics are beautiful:
low overhead, repeat clients, and mandatory renewals.
When a business model makes money because regulation exists, you’ve got built-in protection.
3️⃣ Multiples Are Still Undervalued.
While SaaS founders are fighting for 8–10x EBITDA, fire protection companies are trading between 3–5x.
And yet, their cash flow is more stable than most tech startups.
That’s the opportunity.
Buy boring at a 4x multiple.
Clean it up.
Systemize it.
Then sell the roll-up for 8–10x.
That’s the spread the wealthy play with — the difference between local operator and private equity buyer.
I don’t chase hype. I chase math.
4️⃣ Platform Potential Is Massive.
This is what really got me thinking.
A fire safety company can be the perfect platform business.
Once you own one, you can bolt on:
Alarm monitoring
Fire sprinkler installation
Safety equipment distribution
Commercial HVAC integration
Every bolt-on multiplies enterprise value — not linearly, but exponentially.
Because together, they create synergy + retention + cross-sell.
This is how roll-ups are built — not by buying everything, but by stacking everything that touches the same customer.
5️⃣ The Exit Equation Applies Here, Too.
I always come back to the same truth: income is nice, but exits build wealth.
This fire safety company might throw off $1M+ a year in profit.
But if we build a platform — a regional roll-up doing $20M+ with 25% margins — that’s a $40–$60M exit waiting to happen.
That’s not theory. That’s math, brand, and execution working together.
It’s the quiet, unsexy empire — built one extinguisher at a time.
Final Thought — The Hidden Heat
Most investors are chasing AI.
Meanwhile, the people keeping buildings from burning down are quietly printing cash.
This is why I write Deal Diary.
Because behind every boring business is a blueprint for generational wealth — if you know how to read it.
And this $5M fire safety business?
It just might be the spark that lights up the roll-up.