Damon Chlarson Bought a $1.1M Insulation Distributor After a COVID Layoff

The Setup Damon Chlarson thought about buying a business for four years before he actually did it. He read, he listened, he built criteria, and he did nothing. Then COVID-19 hit and his employer laid him off. The forcing function did what years of self-education could not. Before the acquisition path, Damon took a detour most searchers skip. He tried to start a garage flooring business from scratch. He did the work, hated the work, and shut it down. That failure became his most valuable filter: he learned what he did not want to do with his days, which is information you can only buy with your own time. His framing is worth stealing. "When you buy a business, you buy a ringing phone. I had a better chance of optimizing a business that ran than starting from scratch." The ringing phone is the asset. Customers already know the number. Suppliers already ship. Employees already show up. Optimization is a smaller problem than creation. The Deal Pacific Insulation Supply is a wholesale distributor of insulation and related construction materials in Salt Lake City. B2B, remote-manageable, scalable. Damon calls that combination the trifecta, and it drove his search. Headline numbers: - Purchase price: $1.1M - 2020 revenue: $2.2M - 2020 EBITDA: $380K - Projected 2021 EBITDA: $600K - Annual debt service: $120K Damon's original budget was $700K. He paid $400K over it. That is a meaningful delta for a self-funded searcher and a useful data point: rigid price caps often screen out the businesses you actually want. The quality of the cash flows determined what he could stretch to, not a pre-written ceiling. At $380K EBITDA with $120K debt service, coverage is roughly 3.2x. Not tight. Room for a bad quarter or a bet on growth. Operating Moves Damon inherited a business already running well. His job was not turnaround; it was optimization inside a distorted market. The 2020-2021 supply chain shock handed smaller distributors a temporary edge. When larger competitors ran out of stock or could not pivot on lead times, Pacific Insulation moved faster, allocated inventory tactically, and caught demand the big players dropped. Projected EBITDA jumped from $380K to $600K inside twelve months. Part of that is operator effort. Part of it is market dislocation. Honest searchers separate the two. By 2022 the tailwind started fading. Normalizing supply chains restored the structural advantages of scale. Damon names this openly rather than pretending the $600K run rate is the new floor. Forecasting got harder as the market re-stabilized. Operating Lessons - Use a failed startup as a filter, not a shame. Damon's garage flooring attempt told him he wanted operator leverage, not hands-on labor. That lesson shaped his search criteria more than any book. - The trifecta (B2B, remote-manageable, scalable) is a real screen. It removes the operator from the bottleneck and keeps the business from capping at the founder's personal hours. - Price caps built before you see deal flow are fiction. Budget at $700K, paid $1.1M, got...