This week I spoke with a business owner who owns five companies across four industries and three states.

He called because he wanted advice on how to finance more acquisitions.

At first, his portfolio seemed almost random compared to typical owners of multiple businesses.

He wasn't rolling up HVAC companies or groups of medical practices.

Instead, he had a list of specific criteria:

He owned hair salons, a wellness center, a light construction services business, and a organization company.

For example, a hair salon with ten stylists qualifies because If one stylist leaves, customers would still come through the door and the other nine could keep cutting hair.

His business buying criteria weren’t within an industry, but with a particular set of characteristics within each business.

We usually describe businesses by their industry or what they sell.

You might describe your business as a SaaS (Software as a Service) company, a restaurant, a manufacturer, an E-commerce brand, or an accounting firm.

Those labels are useful, but they can also hide fundamental characteristics that make the business a business.

When I meet potential clients for the first time, I always get them to, “Tell me about their business without telling me about their business.”

Don't tell me you're an HVAC company or medical SaaS.

Instead of HVAC, tell me you operate a local service business with recurring replacement demand, skilled-labor constraints, moderate capital requirements, seasonal cash flow, and an owner who still closes most of the large jobs.

Instead of SaaS, tell me you have 85% recurring revenue, 92% gross margins, low customer concentration, 110% net revenue retention, and an eighteen-month enterprise sales cycle.

Once you remove the industry label, you stop describing what the business does and begin discussing how the business works.

Obviously, industry is an important variable and it tells us a lot about a business.

If someone says “HVAC,” you immediately infer labor, service calls, seasonality, equipment, local competition, etc.

But it is an abstraction that can smooth over significant realities. A map shows locations for roads and rivers but doesn’t include the actual contour of the land or vegetation. Facts that could meaningfully affect moving from point A to point B.

Within a sector or industry, businesses can vary significantly on:

For example:

HVAC Company A

HVAC Company B

If you were buying one of these businesses, lending to one, or trying to value one, “HVAC company” wouldn't tell you nearly enough.

It’s just as important for founders and business ownwers.

Once you understand your business by its characteristics, you can learn from businesses outside your industry.

A roofing company may have more to learn operationally from pest control than from another roofing company if both are managing:

Likewise, a recurring-revenue service company may have more to learn from SaaS about retention and cohort behavior than from another traditional service business.

I experience this bias as a fractional CFO. I will see someone post, “We need a fractional CFO with e-commerce experience.”

But maybe what they actually need is someone who understands:

Someone may have all of that experience without having spent five years inside an e-commerce company.

Some industries genuinely require specialized knowledge because of regulation, reimbursement, accounting rules, or technical complexity.

Most often, “industry experience required” really means “we haven't identified the underlying problem clearly enough.”

Try the following exercise:

Write a description of your business without using:

Instead describe:

For example,

We are a repeat and project-based revenue business serving local residential customers. Revenue is primarily generated through inbound leads and referrals, with some recurring maintenance work. Our biggest operational constraint is finding and retaining skilled technicians. The business depends most heavily on our field team and the owner’s ability to generate and close larger jobs. Growth requires more technicians, stronger scheduling systems, and consistent lead flow. Our strongest advantage is our local reputation and installed customer base. If the owner disappeared for 90 days, day-to-day service would continue, but sales and larger customer relationships would likely suffer.

This could be describing almost any local service business including HVAC, plumbing, electrical, roofing, etc.

You can download the template with examples covering different types of businesses here. The document also includes an AI prompt if you would rather your favorite AI take you through the exercise.

On the surface, my potential client’s business portfolio looked disjointed. A closer examination revealed something different. He wasn’t buying businesses based on superficial similarities but core functional ones.

He was buying businesses with operating histories, low key person dependencies with manageable geography and favorable financing structures.

He cared more about how the businesses functioned than what they sold.

This reframing can help your business. Too often we get trapped in our own mental models for how things do or should work. This can lead to two types of errors; false similarities and false differences.

False similarities lead us to believe that businesses within an industry function the same. “That’s just how HVAC companies work.” This could be true, but shouldn’t be accepted by default.

False differences lead us to believe that our business is unique solely based on its industry. This limits our learning from models and experiences across industries.

Strip away the product, the industry, and the familiar labels. Describe how you make money, where the business is fragile, what constrains growth, what makes it durable, and what would happen if you disappeared for 90 days.

You may find that the best ideas for improving your business are coming from places you weren’t looking.

My goal with The Leap is to provide you each Saturday with the knowledge, tools and lessons learned to help you get started and keep going toward building your future.

Whether you are making the leap to startups, solo-entrepreneurship, freelancing, side hustles or other creative ventures, the tools and strategies to succeed in each are similar.