THE SPOTLIGHT | Issue 023 | October 2026

Welcome back to Wednesday’s Spotlight. Today, we are looking at Lakeland Escape Room, a seven-room business in Florida that accountant and business broker Adam Whelchel bought in March 2026 for $220,000 after its annual earnings fell 43%. He saw an opportunity to increase revenue by filling rooms that were operating at just 7% to 10% capacity.

Lakeland Escape Room opened in downtown Lakeland, Florida, in 2016. The business operates seven themed rooms where groups solve puzzles against the clock. By early 2026, it was generating $365,000 in annual revenue, but its earnings had been falling for several years. In March 2026, accountant and business broker Adam Whelchel bought the business for $220,000.

The business once generated $185,000 in annual seller's discretionary earnings (SDE), which includes the owner's compensation and certain expenses added back to profit. Earnings later dropped to $125,000 and then to about $105,000, where they stayed for two years. Overall, earnings fell 43%, while annual revenue remained close to its historical average of $350,000.

The previous owners had started the business when their children were younger. As their family circumstances changed, they spent less time managing it. By the time they decided to sell, they handled about six hours of administrative tasks each week. They had not introduced a new escape room in more than two years, and one room they purchased from another operator had received poor customer feedback.

Whelchel had spent roughly a decade building Axis Accounting and Tax into a business generating approximately $1.5 million in annual revenue with 22 mostly part-time employees. He later became a licensed business broker. Lakeland Escape Room was one of his own listings, and he became interested in buying it while preparing its marketing materials.

What interested him was the unused capacity. The seven rooms could accommodate about 50 customers at once, but the business operated at only 7% to 10% of its theoretical capacity. Whelchel believed he could increase bookings without large additional expenses.

Group bookings offered particularly attractive economics. A booking for 49 people at $38 per person would generate $1,862 before discounts. Even after reducing the price to approximately $1,100 to $1,200, Whelchel estimated that three employees would cost just $135 for the event, assuming each received $15 an hour for a minimum of three hours. That left nearly $1,000 before other operating expenses.

Whelchel purchased the business for approximately 2.1 times its latest annual SDE. He arranged $265,000 in SBA financing to cover the $220,000 purchase price and $45,000 for improvements, including a new room. Whelchel initially requested that $115,000 be assigned to depreciable assets. The sellers countered with $92,000, and they eventually agreed on approximately $108,000. He expected the resulting depreciation deductions to reduce his projected 2026 tax bill from about $95,000 to $57,000, subject to the applicable tax requirements.

After taking ownership, Whelchel removed the poorly received room and began developing a replacement. He also discovered that only 15% of previous customers had returned. The business already had customer contact information but had made little effort to encourage repeat visits. He began improving its Google Business Profile, contacting former customers, and approaching local businesses about team-building events.

By September 2026, Whelchel reported that revenue was increasing compared with the previous year and capacity utilization was approaching 15%. The new room was nearly complete. His longer-term goal is to reach 20% capacity, roughly twice the utilization level he had identified before the purchase.

Sheridan's Cottonwood Kitchen + Home asks $780K on $165K cash flow, inventory included

Asking price: $780,000, including $300,000 of inventory
Annual revenue: $1,200,000
Cash flow: $165,000 SDE
Asking multiple: 4.7x SDE, or 0.65x revenue
Employees: 3 full-time, 7 part-time
Seller support: Training and transition help

Cottonwood Kitchen + Home has operated in downtown Sheridan, Wyoming, for more than 30 years, from a historic building at 234 North Main Street. Jessica and Jeff Garrelts bought it in 2011, after Jessica had worked at the shop during college. In 2022, they bought a local flower shop and folded it into the store. Cottonwood sells kitchen tools, cookware, small appliances, home goods, specialty foods, gifts, and floral arrangements. A second-floor teaching kitchen hosts cooking classes, private events, and pop-up dinners. The space includes more than 6,000 square feet of retail floor and about 5,000 square feet of storage. The owners are selling to focus on other businesses.

Translation, if you own one: If you own a specialty retail store, buyers will look beyond revenue and profits. They will examine how quickly inventory sells, whether products retain their value, and how much the business depends on you. Clear inventory records and consistent earnings can help support your asking price.

A broker charges a fee for helping you sell your business. Your agreement may require you to pay that fee even after it ends if the broker introduced the buyer. On Friday, we explain what the broker’s fee covers, how tail clauses affect payments, and which terms you can negotiate before signing.