Buy a Small Propane Company or Start One From Scratch? Looking for Advice
Looking for some honest advice from people who have been in the propane industry longer than I have.
I’m in my late 20s and have been involved in the propane business since I was in college. Over the years I’ve worked in multiple areas of the industry and have tried to learn as much as possible. I’ve done service work, sales, operations, customer service, logistics, and back-end P&L/business management responsibilities.
I know I still have a lot to learn, but I feel confident that I understand the business and have the work ethic to eventually run my own company.
This isn’t something I’m planning to do tomorrow. My goal is to spend the next 5-8 years continuing to learn, building relationships, and saving capital so I can put together a solid plan.
My question is: if you were in my position, would you recommend starting a propane company from scratch or buying a small existing operation?
Starting from scratch seems like it would require giving up a steady income while building a customer base, installing tanks, and creating cash flow. On the other hand, purchasing a small company would provide customers, equipment, and revenue from day one, but it would likely require a larger investment and possibly relocating to wherever the opportunity exists.
For those of you who own propane companies or have been involved in acquisitions:
Would you start from scratch or buy?
What are the biggest challenges people underestimate?
How many customers would you want an acquisition target to have?
What level of capital would you consider the minimum to make either option realistic?
If you could go back and do it again, what would you do differently?