Welcome to Upper Market
Each week, I hand-pick & highlight one business that’s recently been listed. I break down what I like (and don’t like) about it.
This makes me wish I had more time to do more deals
What’s ahead in this Newsletter:
[Series]: Playing The Game - Start with the End
This Week’s Deal
Last Week’s Deal
Playing The Game: Start With The End
When is enough, enough?
If you know the number (what it costs to sustain the life you want, outpace inflation and never need to work again) you have something to build toward. Most people don’t take the time to figure this out.
I built a tool to help with this. It's called the Sovereignty Calculator. Until now, I haven't shared it publicly.
It models three scenarios:
Work and save toward a retirement fund
Buy a business and reinvest profits toward a retirement fund
Buy a business, reinvest profits and take an exit
Each path reaches sovereignty. They don't reach it at the same speed.
Reinvesting surplus business profits compounds faster than most people expect. A well-timed exit can pull years of future earnings into a single transaction and move the date forward significantly.
The process is simple:
The process is straightforward. Know your income goal. Build an asset base around it. Understand what kind of business gets you there and how you plan to acquire it.
Have a play around and tell me what you think.
This Week’s Deal: Dental Practise
Dentistry is an industry that rewards… patients...
Build the reputation, fill the chairs, recruit and retain high quality dentists, keep the patients coming back. This one has done that.
$1.7m in revenue. $550k in Seller's Discretionary Earnings. Six chairs. Booked six weeks in advance. Established 2017.
What stands out here is the breadth of the clinical offering. General, cosmetic, paediatric, orthodontic and implant. Most small practices live and die by general dentistry. When you can capture a patient across multiple service lines over the course of their life, the economics change. High customer lifetime value.
The six-week forward booking is the most important number in this listing. It tells you demand isn't manufactured. It also tells you there's a ceiling that hasn't been addressed yet. There’s upside waiting to be unlocked.
What I'd Want to Understand:
First is the revenue split across service lines. Implants and cosmetic carry very different margins to general dentistry. I want to know where the money is actually coming from and how much we keep.
Second is clinician dependency. How much of the $550k walks out the door if the principal dentist leaves on day one? We should also model what could happen if one of the other clinicians were to leave. The two-year transition offer is encouraging, but I'd want to understand what the patient relationships actually look like.
And as an aside, why are they happy to stay on and work for 2 years?
Third is the under-utilised room. A non-clinical space in a six-chair fit-out is either an easy win or a landlord's problem. I'd want to understand what it takes to convert it and what it adds to capacity.
Fourth is the freehold option. Owning the real estate removes your biggest long-term lease risk and adds diversity to the asset base you’re acquiring.
Growth Angle: How realistic is it to find an extra clinician. , extend hours, convert the spare room. The chair capacity is already there. You're not building the infrastructure — you're filling it.
The Drawbacks: This is a regulated, clinician-dependent business. If you're not a practising dentist, you're buying something you can't run yourself. The acquirer pool is narrower than most deals, which also means the resale market is narrower. You need to go in knowing that.
Final Thought: A fully booked, multi-discipline practice with decent earnings, a willing vendor and a freehold option on the table is a decent asset. The real work here is understanding how much of the value sits with the business, and how much belongs to the person currently running it.
If you want more details on either of these businesses or would like an introduction to the sellers, just reply to this email.
Last Week’s Deal: There Was No Deal
I know. I was disappointed too.
But you've come this far and I'm not going to leave you hanging.
Here's the deal and thesis I'm personally working on right now with partners of mine from the UK.
Notes:
Melbourne-based healthcare talent agency
B2B model - supplies healthcare businesses with workers when they're short-staffed
$4M buy price, $1M net earnings (prior to due diligence)
4x multiple on earnings at asking price
Thesis Notes:
Healthcare in Australia is primarily government-funded through the NDIS, making demand relatively stable and recession-resistant
Direct healthcare providers are margin-constrained. Scheduling employed staff profitably is difficult
A talent agency sits above this problem. They invoice the healthcare business for work completed and pay contractors only when work is done
The client relationship is with the healthcare business, not the worker. This makes their clients sticky.
Revenue repeats as long as the client is understaffed, which in Australian healthcare, is structural
What I'm unsure of:
Talent procurement - how are they consistently sourcing contractors and where does that break?
Geographic expansion - is there a credible pathway into Sydney and Brisbane, and what does that require operationally?
Owner dependency - haven't mapped out their involvement yet to determine the true cost of replacing them
Contractor classification risk - are workers engaged as genuine contractors or is there reclassification exposure under Fair Work?
Client concentration - how many healthcare businesses make up the revenue, and what happens if the top two or three churn?
NDIS policy risk - government funding settings can shift. Worth understanding how exposed the client base is to any pricing or eligibility changes
Acquisition Pathway into Private Care - I would only pull this trigger if there are clear synergies. For example, buying a Private Care business that already uses a competitor to the Talent Business.
If this goes somewhere, I’ll be sure to let you know.
