Project Based Businesses

April 06, 2026

by a searcher from Florida State University in St. Petersburg, FL, USA

While I understand recurring revenue models are highly attractive to all of us, at what point does a project based business become attractive to investors and SBA lenders? I am referring to glass fabrication/installation, custom cabinets, etc… I like these types of businesses personally, but I am curious on others thoughts and experience with raising capital for this type of business and the smaller buyer pool for potential exit in the future?

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Reply by an intermediary
from The University of Chicago in Chicago, IL, USA

A different angle. The key is ... does demand for the product/service exist? For project-oriented businesses, if the project size is small relative to sales, it is a good business (ABC). In recurring revenue business, if the market is saturated (think of telephone), it is not necessarily a gold business (XYZ). ABC type businesses are easier to grow, more things can be done in operation, cost reduction, service enhancement, etc. XYZ businesses are difficult to grow. a loss of a customer is difficult to replace, technology risk is high, etc. Over 40 years, I have seen many ABC businesses skyrocket; have not seen a XYZ business do so.

Reply by a lender
from University of Missouri in Denver, CO, USA

I agree with the above. While recurring income is the gold standard, there can still be really worthwhile businesses that are project based. It is key to make sure there is not too much key man risk, the consistency of cash flow and stability, hopefully little to no customer concentration, etc. I think these deals are worth pursuing under the right conditions

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