Welcome to Upper Market

Each week, I hand-pick & highlight one business that doesn’t seem to suck.

It’s Easter. And the End of Last FY + Start of 2027.

On long weekends like these, people spend more time thinking about their future and what they need to change in order to achieve their goals.

For some owners, that means selling.

For some buyers, that means getting serious about buying.

What’s ahead in this Newsletter:

[Short read. Summary at the bottom.]

For the next few weeks, we’ll be addressing each of the constraints that take place in the process of buying a business.

This week, we’re addressing your thesis.

If deal flow fills the table, your thesis decides what stays on it.

A thesis is simple. It’s your clear belief about:

It forces you to answer questions that you’ll otherwise avoid:

What am I actually looking for?
Why does this work for me specifically?
What do I expect to improve?

Without this, everything looks like an opportunity.

Not having a thesis was my original mistake.

I was obsessed with trying to do something “no-money down”. It led me to executing on poor businesses that had no hope for growth.

Real bottom of the barrel type stuff.

No structure, led to no filter, which led to no standards.

The problem for most first-time acquirers is they haven’t seen enough.

Thousands of businesses to be looked at with no developed pattern recognition.

At the beginning stage, it’s hard to tell what’s good, what’s bad, and what fits.

So people default to vague thinking:

“Baby-boomers are selling good businesses and I want to buy one”

“I want to buy a good business and do nothing”

Not terrible thinking, just seriously misinformed.

The way out of this is continued exposure to businesses that come on the market.

This email newsletter has an average open rate of 90%, meaning that practically everyone subscribed is seeing a new opportunity with someone else’s perspective every single week.

Run that, with looking at what’s for sale, getting information memorandums and talking to brokers + building your deal flow (last week’s constraint) is how you start skilling up.

Over time, you start to notice patterns:

This builds what I call “getting your eye in.” It’s the same as a shootaround before a basketball game.

You’re not trying to win anything just yet, you’re trying to get familiar with the environment.

A good thesis is restrictive.

It defines:

Most importantly, it tells you what to ignore.

There’s no such thing as a perfect thesis

In fact, I would go so far to say that every thesis will break.

You’ll buy something and realise what you missed. You’ll overlook something and end up paying for it.

All of this is part of the process.

Next week, we’ll look at addressing the third constraint: Capital

Heating isn’t optional.

When winter hits, people don’t debate whether they need warmth. They just decide how they’re going to get it.

This business sits right in the middle of that decision.

What stands out here is the combination of product + install.

A lot of retailers sell the product and leave it there, but this business goes further:

This matters for a couple of reasons:

Full solution delivery, with the ability to charge servicing fees.

For something like this to produce strong earnings, it usually means the operation is structured properly and the team knows what they’re doing.

One person can’t deliver everything, you need an operation with business integrity.

Something I like about this business is that part of its product offering is stimulated by winter driving demand.

Not very often do you find businesses where winter is the trigger for sales. It’s normally summer that gets all the flash.

Rather than leaving summer as the “down” period, product sales and installations still happen for;

That balance smooths revenue across the year.

What I’d Want to Understand

First is how much of the revenue is install vs product.

Installation tends to carry better margins and creates more control.

If this is heavily product-driven, the business behaves very differently.

Second is capacity constraints.

How many installs can the current team handle per week?

If demand increases, what needs to happen to service it?

This tells you whether growth is operationally simple or not.

Third is lead flow quality.

Where are customers coming from?

If enquiry is consistent and not overly reliant on paid channels, that’s a strong position.

Growth Angle

There are a few obvious levers.

Potentially replicate into other regions if the model holds.

The Drawbacks

You’re dealing with a more complex operation than standard retail.

Installations require coordination and you’re going to need competent staff, with a way to train them.

Mistakes here can be extremely expensive.

There’s also some exposure to housing activity and discretionary spend on higher-end products.

Final Thought

A lot of retailers compete on price, but this type of business competes on delivery and execution.

Dial it in, and this business becomes hard to compete with.

If you want more details on either of these businesses or would like an introduction to the sellers, just reply to this email.

Fresh produce looks simple.

It’s not.

Anyone can sell fruit and vegetables. Very few build something people consistently choose to go to.

This business has been operating for over 20 years. In food retail, that tells you most of what you need to know. Customers come back, suppliers stick around, and the operation works.

The numbers are strong for this type of business.

Food retail is typically low margin with a lot of moving parts. When something is doing close to $4m in revenue and still producing solid profit, it usually means the operator has control over:

This combination is hard to get right. This tells me that the systems here work.

This is not a commodity produce store.

It sits at the premium end. The focus is on quality, presentation and sourcing rather than competing on price.

This ultimately changes the economics.

Customers are less price sensitive and more consistent. That leads to better margins and more predictable revenue.

There’s also a repeat behaviour element here.

A database of this size in a business like this suggests regular, returning customers. Food is already a frequent purchase. If customers prefer one store over others, that turns into steady weekly revenue.

Supplier relationships matter more than most people think in this category.

If you’ve been operating for this long, you’ve likely built strong connections with growers and distributors. That shows up in product quality and consistency, and sometimes pricing.

That’s not easy for a new entrant to replicate.

What I’d Want to Understand

First is location dependency.

Is this business performing because of where it is, or because of what it is?

That determines whether it can be replicated.

Second is waste control.

Margins in fresh food are heavily influenced by how well stock is managed. Ordering, turnover and shrinkage all feed directly into profit.

Third is staffing.

Retail at this scale can become staff-heavy. I’d want to understand how lean the operation is and how dependent it is on specific people.

If we need to hire, how do we do it and by proxy, how do we train?

Growth Angle

There is a path to expansion here if the model translates.

A premium produce concept can work across multiple locations if:

The Drawbacks

It’s still retail.

Perishable stock, staffing, and daily execution all need to be managed well. There’s not much room for error.

Final Thought

Most produce stores compete on price and only a few build preference.

This looks like one of the latter, but how can we prove it?

If you want more details on either of these businesses or would like an introduction to the sellers, just reply to this email.