Why we publish these
These are the tools we actually use. We are publishing them because a firm with no track record should be judged on its thinking, and because none of them stop working when somebody else knows about them.
Each one came out of the same problem. A business with real revenue, durable demand and thirty years of history is worth far less than it should be, and the reason is almost never the demand. It is that nothing underneath the revenue has ever been measured, priced, written down or made independent of the person who built it.
These four frameworks are how we find that gap, size it, and close it. They are written for operators as much as for investors. If you run one of these businesses, you can use them without us.
01. Revenue × Quality × Transferability
Value is a product, not a sum. Growing one term while the other two sit still is the most common way an owner works twice as hard for the same price.
Ask an owner what would make the business worth more and almost every answer is revenue. Revenue is one of three terms, and it is the one with the lowest ceiling.
Revenue is the obvious lever and usually the easiest to move first. It is necessary. It is not sufficient.
Revenue quality is what a dollar is worth per dollar. A dollar of contracted, recurring, renewing revenue is worth more than a dollar of one-off work booked from a search ad, because it is predictable and because it does not have to be re-sold. A signed service agreement is an asset. A series of one-off jobs is a series of sales events that happen to have gone well.
Transferability is whether the business survives its owner leaving the room. It is the term owners underweight most, and understandably: to the person running it, the business obviously works, because they are doing it every day. To a buyer, a lender, or a successor, a business that stops functioning the week the owner gets sick is worth close to nothing regardless of the revenue line. There is nothing to buy. There is only a person to hire.
Double all three and you have eight times, not three. That is a more defensible route to a step change in value than pushing volume until the top line alone gets there, because volume alone, sold at the same undifferentiated price into the same market off the same capacity ceiling, does not get to a step change. It gets to tired.
How we use it. Before we price a business we score all three terms separately, and the gap between them tells us what the work actually is. A company scoring well on revenue and badly on the other two is not a bad business. It is an underpriced one with a clear list of things to build.
02. The Site File
A business where the knowledge lives in one person's head cannot be sold, financed, staffed, or scaled. The file is how that knowledge becomes an asset.
Every field business accumulates enormous operational knowledge that never gets written down. Which unit at that address is on a failing board and has been for two years. Which customer wants a call before anyone pulls into the drive. Where the shutoff is, which panel is mislabeled, what the last crew found and did not write up, which building's access code changes every quarter.
The best technicians carry hundreds of these. It is why they are the best. It is also why the business cannot grow past them, cannot survive them leaving, and cannot be handed to anyone else without a painful and expensive re-learning of things it already knew.
The fix is unglamorous. A written file per site or per account, updated the same day, capturing what the person on the job learned that is not on the invoice. Not a CRM record with a name and a phone number. A file about the place and the relationship.
Two things happen when this exists. The customer experiences a company that remembers them, which is worth more in a commodity trade than almost anything else that can be bought. And the company converts tacit knowledge into a transferable asset, which is the single largest determinant of whether it can be sold for a real number.
The test is simple and most businesses fail it. Could somebody who has never been to this site do the work to the same standard tomorrow, using only what is written down? If the honest answer is no, the business is a job with employees, and it will be priced like one.
How we use it. The rebuild we run during diligence tells us where value sits. The site file tells us whether that value is attached to the company or to a person who could resign. We treat the presence or absence of it as a direct input to price.
03. Route Density Is the Margin
In any business that sends people to places, price is capped by the market and drive time is capped by nothing. The second one is where the margin actually moves.
Owners of field businesses tend to think about margin as a pricing question, because pricing is the lever they can see. In a competitive local trade, price is anchored by what the market publishes and what the last competitor quoted. There is real room to move it, and it is bounded.
Drive time is not bounded, and almost nobody manages it deliberately.
The arithmetic is unforgiving in both directions. Four jobs a day with fifteen minutes between them, versus the same four jobs with forty minutes between them, is roughly seventy-five minutes of recovered production per truck per day. Across a working year, on a single truck, that is a meaningful share of what the truck earns. Across a fleet, it is the difference between a business that works and one that is quietly busy and unprofitable.
This is why we build in density-first regional clusters rather than taking good businesses wherever they appear. Geographic concentration is not a preference about how we like to travel. It is the mechanism by which a second, third and fourth acquisition raise the margin of the first.
The failure mode is that every individual exception looks rational. A well-paying job forty minutes outside the cluster is worth taking, considered alone. Considered a hundred times, it is the margin. This needs a stated rule with a number on it, not case-by-case judgement.
How we use it. Density is an underwriting input, not an operating preference. A business that fits an existing cluster is worth more to us than an identical business that does not, and we will say so in the price.
04. The Capacity Ceiling Test
Set the growth target high enough that the founder cannot personally absorb it. The point is not the growth. The point is what the growth forces.
A growth target a founder can hit by working harder proves the founder can work harder. It proves nothing about the business.
Every owner-operated business has a ceiling that is a function of one person's hours. Below it, the owner absorbs everything: the extra jobs, the quoting, the scheduling, the difficult customer, the Saturday. Growth up to that ceiling is real revenue and it is not evidence of anything transferable, because the constraint has not been tested.
So we set the target past the ceiling on purpose. Not to be aggressive about growth, but because the moment the business needs a second pair of hands is the moment everything that was implicit has to become explicit. The pricing has to be written down or the new person quotes it wrong. The process has to be documented or the work comes back different. The site knowledge has to leave the founder's head or the customer notices immediately.
The proof point is one job, done to standard, by somebody who is not the founder, using only what is written down. If that happens once, the business is transferable and everything else is scale. If it never happens, the business is a job, and no amount of revenue growth changes that.
How we use it. In diligence, it tells us whether we are buying a company or a person's calendar. After close, it is the sequencing rule: we do not treat a business as ready for a bolt-on until it has passed this test on its own.
How they fit together
They are one argument in four parts.
A business with durable demand and no infrastructure is cheap because two of its three value terms are near zero. Revenue quality is low because nothing is contracted and everything is re-sold. Transferability is near zero because the operating knowledge is in somebody's head and the operating capacity is in their calendar.
The site file is how the second of those gets fixed, by moving knowledge out of a person and into the company. Route density is how the margin gets fixed, by managing the cost that nobody was managing. The capacity ceiling test is how you find out whether any of it actually worked, because it forces the handover that proves it.
None of this requires paying more, waiting for the multiple to move, or betting on the exit market. It requires buying a business where the work has not been done, and then doing the work.