In this episode of JackQuisitions, Jack breaks down one of the most important acquisition questions heading into 2026:
What industries should you avoid… and which ones have the biggest tailwinds?
Jack walks through his framework for evaluating businesses through an acquisition lens — not as a lifestyle operator, but as a buyer looking for scalable enterprise value and an eventual exit.
He explains why some industries that look “hot” on paper can become absolute landmines once you layer in debt, external dependency, labor constraints, and demand volatility.
From construction downturn risk… to solar’s subsidy collapse… to storm-chasing roofers getting squeezed by regulation — Jack lays out the 3 worst businesses to buy in 2026.
Then, he flips the script and shares the 3 best acquisition targets heading into the new year — including recurring-service models, fear-based moats, and the most underserved trade opportunity in home services today.
If you’re buying a business in 2026, this episode is a must-watch.
🔍 What You’ll Learn
- The acquisition lens that matters most: lifestyle vs scalable enterprise value
- Why urgency of demand is everything in home services
- The hidden danger of external dependency when you’re carrying SBA debt
- Why construction businesses can wipe buyers out during downturns
- The biggest headwinds crushing solar in 2026 (subsidies, rates, bankruptcies)
💼 Special Thanks to First Internet Bank!
Looking to buy or expand a business? First Internet Bank is a National Preferred SBA lender specializing in acquisitions for the skilled trades. Their SBA loan program offers up to 90% financing for business acquisitions, partner buyouts, and commercial real estate—plus optional lines of credit to fuel future growth. Unlike traditional lenders, they take a “how can we” approach, making deals happen for both first-time buyers and experienced operators.
👉 Special Offer: Mention Owned and Operated for a reduced good faith deposit and a complimentary deal review + buyside prequalification.
Connect with Alan Peterson from First Internet Bank here
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💼 Shoutout to Quick Staffers LLC
Need trained HVAC & plumbing CSRs at a fraction of the cost? Quick Staffers LLC specializes in placing top-tier global talent with the best SOPs and scripts.
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🔗 Connect
Jack Carr – https://www.x.com/thehvacjack
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If you are buying a business in 2026, this might be one of the most important videos for you. When we're looking at buying businesses, the most initial step is making sure that you choose the right industry with tailwinds, not headwinds. So here are. Three of the worst businesses to buy in 2026. And why?To start, we're gonna look at this from two sets of lenses. The first lens that we always evaluate a business acquisition in is, is this a lifestyle business or is this a business that we can grow and scale? If you want a lifestyle business, this video is not for you. You can go grind stumps. By yourself on a one piece of equipment, and you can make six figures a year that, I'm not saying that that's not a good business, that's a great business for you and your lifestyle, but when we're looking at evaluating businesses from an acquisition and an exit standpoint, we always need to look at we making sure that these businesses have a enterprise value at the end.That they can grow, that they can scale, and that they're worth something to a buyer. So, we'll, we'll reference private equity a lot in this video. Next is going to be items like urgency of demand. When a customer calls, how urgent is it that they get the salt? Is it a need or is it a want? Is there any repeatability in the business?Is it a recurring service? Uh, do you have the ability to expand the ticket to make more money per customer by offering new skews or a bigger job? Um. Number four is like operational leverage. How much can you being good at operations actually drive scalability in your business, whether that's route density, dispatching, if it's standardization, if it's SOPs, et cetera, et cetera.Number five is going to be the labor market. What's the labor market look like for this type of business? Uh, and lastly. And one of the most important ones, in my opinion, is external dependency. Is this business dependent on an external factor. And some of the worst businesses today are dependent on external factors that are changing.They change every year, or they change every few years. And this can make for a bad business model, specifically if you have debt because you just bought it. So let's kick in. Okay, so the first. Worst business on my list of 2026 to buy is always, for every year for the past five years has been construction, home service, trade construction businesses.And it's not, I know I'm many people in the comments saying, Jack, I've been in construction, construction's awesome and I make a ton of money, and it is. It can be when the market is good. So construction has these peaks and valleys where it is a great business some years, and it is an absolutely terrible, horrible, worst business in other years.So think back to 2008, look at the construction market in 2008. I saw so many contractors lose their entire lives, their house, their cars, their trucks, their boats, everything. In a span of two years because they were in a industry that had. It collapsed. It had completely collapsed. So when buying a business specifically and looking at construction, it gets even more risky because if you buy a business with debt, you're going to have a monthly debt service payment.When you look at construction, you're looking at long payment times. You're looking sometimes at long lead times on jobs to even be able to pull a draw on that. A lot of it goes initially to materials, so you're not able to pull that money. Every month. And that creates a huge issue. If you're buying something with debt like an SBA seven day loan with Alan, he'll tell you the same thing.The other part of construction besides the peaks, the valleys, the poor payment schedules, getting one bad GC who doesn't pay you at all 'cause he goes belly up. There's your external dependency is you have to rely on general contractors to be able to pay you and do the right things. The the thing with debt too is, is it doesn't even have to be a bad 2008.Style crash to absolutely wipe you out. We saw it in 2022. There was a market scare. We saw it again in 2018. It's a market scare where construction stopped for six months solid. And so these kind of scares and pullback on construction, whether it's due to material pricing, industry, consumer demand, whatever that may be, that can absolutely sink that business within that period of time.Going on to my number two pick, it's going to be solar. Solar in the past five to 10 years has been an extremely hot industry. We have seen huge promise. There's, it's made tons of, uh, door-to-door salesmen, very, very wealthy. It's huge, huge market. Uh, specifically in Southern California and Las Vegas and Arizona, like there's a big opportunity for solar or there was.What we've started to see, and where I'm downgrading this to being the worst business to buy in 2026 is due to the market change in external. Dependency specifically in the realm of resources provided by subsidies by the government. So in the last few years, we've seen the subsidies dry up in some of these areas.They're not as lucrative, making this a much more expensive and non-return on investment for homeowners, and therefore sinking a large portion of the market this year alone. We've seen interest rate swings that have ruined financing terms for homeowners. We've seen dealer fees skyrocket in lender appetite.We've seen in the past few years that the manufacturing from China has caused this industry to, the tariffs have gone up, the shipping costs have gone up. So it's all this, this headwinds for this solar industry, which has caused for some massive bankruptcies in the last year. Um, I mean, in 2025 alone, sunnova.Filed for chapter 11 and left seven, 700 plus people without a job. So this is a rough industry for that reason. It has a ton of headwinds, but it's also a rough industry for acquisitions specifically because when you're buying businesses, you want to make sure that you're being very careful about previous years.So you're buying this business based on its previous year history, but. You C, if you don't have a full understanding of the external dependencies and what's changing into 2026, you might look at the, the last three years of a business that's inclining in revenue, inclining in ebitda, and hey, well, they're selling now because they're passing the bag right before it gets to a really bad year because of external issues.So you have to be extremely careful when you're working on. Buying businesses that potentially had good last three years, but then something has changed. That's why, that's the biggest reason why my number two is solar. Solar, solar, solar from an install solar, from a sales solar is just a very external risk to business vertical right now.So just be very careful with buying a solar business in 2026. My number three worst business to buy in 2026 is going to be a roofing business, but. It is a roofing business, specifically the sector of storm chasing insurance roofers. So there's two sides to the roofing industry. One side is consumer based, where they're going out to consumer homes who have damage to their roof.They work with the consumer, the consumer pays them, et cetera, et cetera. Great business still. I love this business model. It's D two C or B2C, um, versus where I think is going to have more issues going into 2026 and where I'd be very careful when you buy anywhere in this package, you wanna make sure that there's more of it in the consumer side than in the storm chasing.I don't wanna call it B2B, but essentially it's a storm chasing business that goes after big. Areas where extreme weather has happened and they go and they work with homeowners, but they're really working with the insurance agencies. They're, they're claiming insurance on all of these homes with big damage areas, and then they're going to the insurance companies and saying, Hey.Damage on roof. We want a new roof and the insurance companies are paying them. Historically. Hasn't been a bad business model, but what we've seen in 2026 is we've seen a tightening. We've seen a tightening in actually 2025 of the insurance realm, and not only in this industry, but in every industry. It's homeowner insurance realm has tightened really dramatically from HVAC and plumbing.We've seen it across the board, and so why I would watch out is because. This, this tightening and exposure risk and, um, these deductible games, like they are going to put this section of the roofing industry in a very tight spot, specifically if it gets any tighter. Not only is that a huge external factor to it, but like you're starting to see regulation from.Local governments. So for example, Texas, um, has just made it explicitly illegal for contractors to waive deductibles, to help homeowners avoid paying them. And that's because there's a lot of shady companies out there doing a lot of shady things. And so Texas is really trying to tighten that up so that.If there is an insurance claim, it's a real insurance claim that's being handled properly and not just storm chasers going through and blanketing out tons of roofs. Even if there is no damage. We are watching out for any company that is working with insurance. So this can be. HVAC that works with insurance companies, home insurance companies, this can be plumbing that works with insurance companies, it can be restoration that's working with insurance companies.It can be, um, roofing that's working with insurance companies. I'm picking roofing just because storm chasing is especially prevalent in their industry. Besides that, the storm chasing model. If you're not working on how to reach customers in a, you know, D two B2C fashion, and working on your marketing game, working on how you are offering your sales pitch and all that kind of stuff, and you're relying specifically on inclement weather times, you have a really big feast or famine.Um, situation and if you don't have any kind of feast that year, you're just going to have famine. And much like the contractors in, in the first example here, the, uh, trade contractors, you have a debt to pay every single month and you can't expect. Uh, storms and damage to happen every single month. And so that leaves you with the situation where you have debt to pay and you can't pay it, and you don't have the muscle and understanding and switch is already firing.To build a brand in your local area, you're out chasing storms. So that is why. Insurance Storm chasing is my number three for worst businesses to buy in 2026. Alright, now that the doom and gloom is out of the way, let's go to my three favorite businesses to buy in 2026. We're gonna go 3, 2, 1. My number three, it is pest control.I love it because it's a recurring business service model, so it's low enough of a recruiting service business model that it hides in people's bank accounts. It has a, it's a very low visual, um. Proof of work. Um, not that I wanna say that we're anybody in pest control scamming customers, but there's very few instances where they'll run into consumers complaining like maybe a consumer seems, sees a, sees a spider and is unhappy.But generally right, they're spraying around your house if you don't have spiders entering your house like you're winning, um, or whatever the, the specific pest control, uh, section is that, that you're spraying for or doing the chemicals for. Those are the three big reasons is you get better. By doing. Um, better marketing and understanding how to work the marketing systems and then building root density so that you can hit 6, 7, 8 houses in a neighborhood in one day.And the better you are at operational efficiency, the better your business will be. So it's marketing. Operational efficiency. Um, there's not too much else. It's a simple business model. Um, so that's the first reason. The reoccurring service is an amazing standpoint to, it. It stays low enough at a hundred dollars a month.That many, you know, homeowners, you know, it's not painful enough that they cut it. They see enough value in that a hundred dollars a month, uh, because they don't see spiders in their house once again. So that's, that's two and three go hand in hand. It's like this really nice fine location of. Uh, where you would get less issues.So for example, if you're looking at an HVAC company or a plumbing company, if you have a small leak in your ceiling. And somebody comes and says, Hey, I'm gonna fix it. Like the expectation is very visual. There is still a leak. I can still see the leak or there is no leak. Like it, it's black or white. But with, with pest control, there's a little bit more gray area for the average homeowner.So it allows for some ambiguity in how they're doing their service and, and making sure that they're focusing a lot on a, doing a good service that you can't, you can't pass that. Like there's no getting around that. But there is some like. Gray area, wiggle room about, Hey, you know, I had a new guy. He messed up a little bit.He forgot to spray this one foot section of the outdoor of the window. Like, they're still gonna be fine. The service was still valuable enough to continue forward. Um, that's why I love pest control. And then on the backside of it, like the, the valuations and the metrics and the economics, I mean. 2025 and 2024, were still like $13 billion a year pest control industry.Um, the only downside, the only red, red flag I have for pest control is it's a not need to have. It's a want to have. So there's really no urgency. So you have to get really, really good on your marketing, maybe really good on canvassing, um, to actually win in this, this industry. I like that. There's also a, um.There's a moat, right? You have to have some kind of licensure in most states to be able to do pest control. That's huge. Um, so I mean, pest control is a solid business. I still think it's a solid business. Uh, and if you can buy a small one and then build it, there's a huge valuation at the end. Um, going on to number two, uh, is going to be restoration mitigation.So water, fire, mold. There's a caveat here. It's the same caveat as in roofing, as if your primary and your only source of work is going to be with insurance companies. So a lot of, a lot of water, fire, mold mitigation companies are strictly insurance. They work with insurance company 'cause there's a, an obvious home warranty issue, right?There's you, you get insurance on your home, you have a flood, like that's obviously an insurance thing. I do not want to. Distract from that. But when buying a business like this, you have to make sure that you are covering the other side. And I think that the other side, this, this B2C, this direct to consumer, um.Uh, area is, I think, super undervalued going into 2026 is this is not an area that has been historically hit hard by private equity. Though private equity and other buyers are looking at this with multiples are starting to, uh, expand, which is wonderful when buying a business. Buy before the expansion, get the benefit of the expansion.But I think like. There is a huge value into being able to come into this industry and market directly to consumers and win with consumers, uh, whether or not it's an insurance claim. So, for example, uh, mold, mold is extremely visual product, or not product, but. Yeah. Uh, it's extremely visual issue. There you go.It's an, it's an, it's a visual issue. And so the fact I don't go on, I mean, I have a lot of marketing research that's done between HVAC and plumbing and electrical and all these kind of sub secs, and I don't ever see anybody, um, uh, I shouldn't say nobody, but I, I see very few competitors out there actually going for this market.The cost per lead on Google is still low for mold. Um, there's nobody marketing mold in your house. Like there's a company down in Southern California that their whole shtick, all they do is re pipes, re pipes, re pipes. They're the re-pipe people, and I hear their ads on Pandora all the time. There's nobody out there doing that for mold that I know of, at least not in my area or in that have me pinged as a potential customer.And this is a huge. Um, benefit, like you can be the mold guys who are having a highly visual content product marketing strategy mixed with Google, mixed with, uh, some aggregators, and then on top of that doing insurance work. And I think on the whole. That is a huge win. Um, moving away from the typical fight for, I need to get all these plumbers in into my Rolodex so that they feed me leads.No, you're getting your leads yourself. If you can do that, this is going to be a huge win for you and your new company. Um. Yeah, I think, I think this is a really great industry that, like I said, there's a lot of tailwind behind it, moving into it as there are a lot of talk about private equity companies starting to do rollups in this area.So this is a great option. Um, what you wanna watch out for when you're buying these companies is watch out for long AR times. Um, it means they're working with lots of either people who are not paying or they're working with insurance companies who again, are giving them issues. Um. You wanna watch out for like, making sure the, the homeowner or the owner of the business is not also the estimator of the business.And if he is, and you're gonna be the new estimator that you understand this industry really well because, uh, one bad, two bad jobs can be really detrimental to your, your new company. So that is why I think home restoration, fire, water, mold. Mitigation and maybe even a little bit of construction is probably my number two favorite business to buy in 2026, with the caveat that it's not only an insurance, uh, business, it is a D two C business, or I keep saying D two c.I come from a D two C world, but B2C, it's a B2C business. Um, and lastly, oh, I forgot this. This is probably one of my favorite parts of fire and mold specifically. Homeowners are afraid of mold. We get it all the time in HVAC where we open up a system, we show a homeowner their mold in their unit, and then that leads to some kind of sales pitch.Homeowners are really, really afraid of mold. Maybe they should be right. Mold can be scary. There's black mold and there's all these kind of molds that can harm and hurt your respiratory systems and all that. I'm not a mold expert. I'm a little afraid of mold. Um. But what that does is it builds a moat around your business.It builds a huge moat around the, specifically the consumer side of your business. The homeowner is really not gonna DIYA entire, uh, clean out of mold in their, uh, cavity because they had a leak inside their, their wall cavity. Um, so that's why they have to call you. There's an urgency to it because hey.Like the, it's an active issue and it's actively going into your home. You're actively breathing it in. And so like the, it's a, it's a great business to not have any kind of DIY access to, which can be huge as a hurtful nature to the home service industries as a whole. And lastly, my number one going into 2026 as the best business that you can buy is going to be an electrical home service business.So we've seen it. In plumbing. We've seen it in HVAC, we've seen it in like the, the big three people will say in electrical too. But in my opinion, electrical is one of the most underserved home service markets currently to date. Um, so why do I love it? Uh, we just started doing electrical. I absolutely love electrical.We are just getting out of the Tennessee storm again in, and we have a ton of electrical work coming in. Perfect timing. Super excited, but. First off, permitting process, right? Again, homeowners have a really hard time. DIYing big jobs, whole panel upgrades, things like that. If you're not an electrician by trade, you can't physically do it, not because you don't want to, but because you need permits and licenses and things like that to get the state to sign off on it.So a huge benefit. Um. To that business too. Homeowners are afraid of it. They are deathly afraid of electrical as they should have a healthy fear of it because it can be dangerous, but. It also creates a more of a moat around smaller jobs. Hey, I can, I don't know how to change out my outlets. I need an electrician to come change out my outlets.This is a huge win, and it makes it so that the whole home is available as something that you can work on, which is my number three YI love this. You whole home is available. You have electrical in your bathroom. You have electrical in your. Garage outside your house, you have wires running across your yard to the plug over there.You have ceiling fans, you have uh, lights, you have security cameras, you have like electricity goes throughout your whole home and it has a great. Maintenance where you can go in and maintain, make sure their service connection, everything's tied, everything's good and nothing's overheating. Um, you have a service component where, hey, I want to change out a light.I want to change, move my switch from here to here. I want to change my circular plugs for square plugs. There's a service component, and then there's a big ticking component ev um, panel upgrades generators. So you have all three, which makes it a great. Option and number. The next reason why I love it, speaking of EV, is we are going towards electrification of the household, not away.Nobody is de electrifying their house to go back to the stone age. Everybody is going more electric as more electric components come out. Right now we do EV for car charging stations, which 10 years ago we didn't do, and so these kind of special components are moving in the right direction. That favors the electrician.So as you start to need more and more electricity for whatever the case may be, whether that's wifi systems or security camera systems, as everything gets better and easier and more accessible, you as a homeowner are going to put more of it in your home. And so that is another amazing reason that you have a ton of tailwinds.The next reason is competition. There's a lot of companies that are trir like ours, hvac, plumbing, electrical, great Home Service base. Great. But there's very few that are electrical only, and if they're electrical only, they are focused on construction usually almost 90% of the time. There's a few in our area, two or three that I can think of that are electrical only home service companies, but these are an amazing company to build because.A, you're, you have no competition, right? The, the construction guide doesn't really want to do six outlets on a home or change your, your switch to dimmers. It's not a value add to that person and that company. Whereas for your company, it is like, that's a huge benefit and you don't have competition. Hvac in our area, we have 40 companies, 50, a hundred companies.Plumbers, we have 30, 40, a hundred, you know, not as many as hvac, but quite a bit. Uh, and then electrical is like four. And they all have nine reviews, two reviews, three reviews, six reviews. And so if you're electrical only, that's your competition, um, as well as the big guys. But like from a, a marketing standpoint, Google views you as the electrical All star because you're an electrical business.Whereas me, if you're competing against me, Google views me as an HVAC company. And maybe a plumbing company, depending which GMB you're looking at, but not an electrical company. And so you are going to win most of those bids for consumers, um, just because again, they're looking for electrical. Google sees you as an electrician.Google puts you first. They put me fourth or fifth. And so I have to work on my branding really, really hard on branding to get there or try to grab the customer in plumbing or HVAC and then get them into electrical. So this is a huge, huge, huge, huge opportunity. If you know, or like electrical or you want, or you an electrician and business person, like this is one of the next huge industries that are gonna be rolled up, in my opinion.Um, it's also part of the TRIR Triangle hvac, plumbing, electrical. Um. And so the ability to, we've seen it in hvac, we've seen it in plumbing. If history is a reflection of, um, the future, then my guess, again, this is not financial advice, but my guess is that electrical will kind of fall in the same pathways as HVAC and plumbing is that once those two get saturated and less fragmented, that electrical is their next choice.And that's gonna have a huge, um, again, by pre. By pre, uh, expansion, sell, post expansion, or hold onto it, hold onto it forever and just pull some great cash, which pulls me into my next reason why I love electrical is margins. The margins on electrical are amazing. They're similar to plumbing in the sense that most of the work falls under the labor, not under the equipment, with the caveats being generators and generators.Um, everything else is, there's very. There's a large amount of margin that you can build into these jobs because most of it's labor. You could have a trenching pipe laying, uh, conduit laying with, uh, electrical in it. That might cost you 3, 4, 500 bucks that you could sell for eight or nine. Uh, again, because you have the equipment, you have the experience, you have the licensing to do it, and that's what the market requires.So huge winning electrical, I'm probably like. Rushing through 10 or 11 items here, uh, because I love electrical so much, but electrical is a wonderful purchase business. Just be careful that you're not buying the other side of the construction side of electrical, because again, back to worst businesses to buy would be construction, electrical, and transitioning a construction electrical business into a residential home service business, electrical.Is a very, very, very, very difficult thing to do. Let me not understate that to anybody. Listening is making sure that when you buy an electrical business that it is a home service electrical business, and not a construction, electrical business. 'cause it'll be a very large uphill battle to be able to transition that into a, uh, home service business.So. Three worst businesses to buy in 2026 are going to be solar construction, new construction specifically and storm chasing roofers. Um, storm chasing roofing insurance industry side of roofing. The three best are going to be pest control mold. Fire and water remediation specifically, if you can really work into the B2C side, um, direct to the consumer side and electrical.So awesome. If you like what you heard, uh, leave five stars. Um, drop a like, comment. Tell me where I missed. Tell me where I'm wrong on solar. Tell me where I'm wrong on, uh, roofing. What did I miss here? Um, why should I buy or why should I start? I'm interested in hearing what you guys are thinking. Lemme try that cut out again.That was terrible. Ah.Awesome guys. Thank you. If you like what you heard, leave a comment below telling me why I'm right or why I am wrong on these businesses. If specifically, if you own one, I want to hear about it. I want to see why you bought this business and why it is awesome, or why you bought an electrical business, and why absolutely is terrible.Leave those comments below. We will reach out to you. We, we read 'em all. I read 'em all, um, like, subscribe, share, follow, whatever it takes to hear more of this great content. Thanks guys.
