Every Business Owner Needs To Understand This Principle

5 Apr 2026 · 1 min

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In a brief dialogue, Speaker A and Speaker B discuss the emerging view that profitable small and medium‑size enterprises (SMEs) will become the most valuable asset class by the end of the decade. They note a wave of liquidations and administrations among owner‑operated service firms—often started by technical professionals such as IT engineers—because these businesses lack scale and financial resilience. The conversation highlights a concrete example: Spruce, a startup that provides a software platform for heat‑pump installers. Spruce illustrates a common pattern where a single founder and a handful of helpers run a niche service (heat‑pump installation), facing pressure to increase pricing and efficiency. The speakers suggest that while many such firms are vulnerable, those that can integrate technology and achieve profitability represent a high‑potential investment opportunity.

The most valuable asset class at the end of this decade will be profitable SMEs. What's your thesis here?
I'm seeing a lot of companies going into liquidation administration because a lot of businesses, as you'll probably see there, it might be an IT engineer who's gone and started a business because it's something they enjoyed.
You know, the IT service business, there's loads of them. We work with a company called Spruce, which is a startup in the heat pump installation business. They've built a software platform that allows heat pump installers to do that. And they see the same thing in the heat pump installation business. You know, it's like one guy and then 10 helpers. And so very, very common. Comes along and everybody's got to pay more and more.
In fact, there's a couple of those types of businesses we're actually at legals at the moment. Renewable energy heat pumps. Okay. Yeah, there's several we're looking at acquiring at the moment because exactly that, they've reached a plateau. They don't know how to grow the business. They're struggling either on the financial side, the resources, or the marketing.