I understand why one would want to avoid cyclicality and seasonality when planning an LBO, especially with a service company with mostly intangible assets. That being both hard to finance and dangerous to buy at the top of the cycle. What isn't clear to me is how to determine if a business is cyclical? Does anyone know of any resources to try to determine this? Further, does anyone have any resources to try to determine where in the cycle an industry is?
Basically, I am seeing many businesses with revenue either trending up significantly or down significantly, and the rationale for these changes is unclear. So far of the ones I have dug into, it does not seem to be the owner driving these trends but the industry. I can guess, for instance, with a pool construction company doubling its revenue over the past 2 years, which, I assume, is a COVID bump due to public pools being shut down. But, that is an assumption, do pool construction companies normally follow the new home construction cycle? How about pool service companies, do they see a dip if the economy takes a downturn?