Considering selling your heating and air company and not sure what to expect??? Below is HVAC Companies that have sold in the last 90 days.
Just for clarification, the first column are the company sales over the last 12 months. The next column is what they initially listed it for and the following column is what it actually sold for. The list down column is what they were asking for a down payment, and the sold down is what they actually received as a down payment. The adjusted net column is what the owner made including adbacks and depreciation. The final column is any FFE that was included in the sale such as trucks, vans, equipment etc..
Please keep in mind that for any list like this one, there is often more to the story;
Lots and lots of reason can affect selling price, I just included this to give you an idea of where it may sell based upon both gross and net income. You may perform your own search by visiting www.bbfmls.com or contacting our office today.
If you have any question or are looking to either buy or sell a heating and air business please give me a call or send me a note, I am happy to help out any way that I can.
Considering growing your company and not sure where to look for acquisition opportunities? Below is a current list of heating and air companies for sale in Florida. Contact me with any questions you may have about one of these listings, or to find out where your company would fit on this list….
If you are looking for ways to increase the sale price of your business, I would strongly suggest reading, “The Emyth”, by Michael Gerber.
I have to admit, I am typically not the person to go to when looking for a book recommendation. I enjoy reading, but unfortunately as I am reading most books my mind starts to wander on topics like, how can this apply to me, will it work, what if I change this, and on and on. After 30 minutes of reading I have to go back and start over.
There are from time to time, books that I read that I feel are real game changers, and The Emyth, is definitely one of those books. This book is not only for those looking to sell their heating and air businesses, but for those who are looking to grow it without going crazy.
Michael Gerber is arguably one of the foremost experts on building a business that does not rely on the owner, and that is where I feel the greatest value in this book is.
Here is a quick list of some of the topics in his book ( and I strongly suggest you buy the book and read it, I am not a professional at summarizing, and only scratch the surface of this great book ):
There is a ton of information in this book that I feel most people can start applying right away, these are just a few I wanted to discuss today.
Let’s put a price tag on each of these and how they could effect the selling price of your business;
As you can see, these items I mention are not only great for those looking to sell their business for the highest amount of money, but for those who are looking to grow your business as well. The two go hand in hand.
For those looking to grab a copy of his book, I have included a couple of links below. I receive no benefit or compensation for recommending the book or where to buy it, I just included them as a matter of convenience.
As always, if you have any questions or if I can help out in any please do not hesitate to reach out to me.
I would love to hear any book recommendations that you have that have made a drastic change in your business, leave your comments below.
Thinking about selling your HVAC business but not sure how soon you should start planning?
The absolute short answer is, The Day You Opened For Business.
As I have mentioned in past articles, I have been where you are, I have started, bought, and sold several companies for myself, including an HVAC Company.
My perspective changed drastically when I started to own companies for the reason of selling them. It really made me look at the company completely different. Instead of building the business around me, and my name, it was about the company, and what we delivered to the customer.
When you look at your business from the eyes of a buyer, it will drastically change how you do things, and why. How is your pricing set up for a buyer? How is your customer tracking information? How strict are you on your maintenance agreements? Each of those things are items buyers look for, and the sooner you start to plan for it the better it can be when it is time for you to sell.
Now back to the original question of this article. When should you start to plan for your sale? If the ultimate plan for your business is to be sold at some point in the future, than you should start to build that business with that end in mind at the start, or as soon as you decide that you will sell it.
Does this mean that you cannot run your business the way you want to? Not at all, what I am saying is that typically when people come to me they mention they should have thought of certain things a long time ago. Don’t put these items off, consider them now as you are still growing your business. Not sure what “items” I am referring to? Here are a few to get you started to a higher sales price:
Hopefully this gives you some ideas to get started. If you have any questions or comments, please let me know, I would love to hear them.
As 2017 comes to an end, hopefully you are planning for great things in 2018 . If the goal for next year is growth, have you considering buying another HVAC or plumbing company as part of that growth plan?
One of the most often overlooked areas for achieving quick growth and penetration into a new market is by acquiring another company that is already serving that area. There are a lot of things to consider when acquiring another company, and this article will not run deep into each of those, but rather help you to consider if acquisition makes sense for your plans, and how it compares to just growing through marketing and other methods.
As someone who has not only started and grown several companies of my own, but someone who has also bought other companies as well, I have seen how both sides work, and some things to consider when looking for fast growth.
One of the fastest ways if you plan to expand into a new area that you are not currently serving is through acquisition. If you are already servicing that area, then you already have exposure from vans, trucks, existing marketing, and hopefully referrals, but what if you are not working in that area consistently enough for the general public to know who you are and how good of a job you can do?
Of course, as you look to expand you need to make sure that you are doing all of the above items mentioned, but as I am sure you are aware, each of those takes time, and money. When you take a look at what you need to spend consistently as well as how long of a process it will be, I would suggest at least taking a look of what is currently on the market in that area, and what the asking price is.
Let me give you an example of a listing I currently have, what its numbers are, and allow you to compare it to traditional marketing in both time and money.
Lake City Florida Heating and Air Company for Sale
Asking price: $180,000
2016 Sales: $440,00
2016 Owner Benefit: $89,000
Now lets discuss numbers for a minute. How much advertising would you have to spend in a new market to generate $440,000 in sales? How many mailings? How many commercials? How much time will it take?
Lets also consider the net income side. In a new area, what would you have to spend in order to add $89,000 of income to your bottom line?
What is the lifetime value of a customer to you? How long does the average customer use your services? Are you better than your competitors at helping your customers with solutions for things like better filtration? UV lights? Annual service plans? Is there more money that can be generated by taking over someone’s customer base that has not been serviced as good as your company does?
Now lets also look at some other ideas. Will the seller consider offering some financing so you can pay for it out of its own cash flow? Will your local bank that you currently use help finance a portion of it based off or your current sales? Being creative is there a way for little to no money out of pocket you are able to add over $400,000 of gross sales to your existing business?
Finally, lets compare that to marketing options? Will Google allow you to finance your adwords expense over a couple of years to pay for itself? Can you do that with your mailing company? How about your person handling SEO, social media, etc.. Can you tell them that once you have made enough money to pay put $89,000 profit in the bank you will start to pay them? Typically not but with acquisition you can.
I completely realize that acquisition is not for everyone, and there are a lot of other things to consider when looking at acquiring another company, but it is certainly an option that should be looked at for growing your company into next year.
If you have questions about acquiring another company, or considering selling your own, please reach out to me, I am happy to help out any way that I can.
Want to sell your HVAC or Plumbing business? Do Not Tell Anyone….
I realize as you just read the above statement you may be thinking, that is the dumbest thing I have ever heard. If I do not tell anyone I am going to sell my business, how will I ever find a buyer? And the answer to that is quietly and with confidentiality.
Let’s take a look why briefly with just three of the top reasons;
Reason #1: So your employees do not find out until you are ready and have found a new buyer. Several sellers I have worked with told me in initial meetings that out of respect they want to tell their employees right away, and I understand and respect your loyalty. However, what you are selling typically will make your existing employee a very needed person, as the new owner is not familiar with your business, customers, and often suppliers and a quality employee will drastically add value to your business.
Many employees when they find out the business is for sale go directly into panic mode, and start to talk with each other of how they will be out of a job, the new owner will not like them, they already hate the new owner, and on and on.
We have achieved much better success with not notifying the employee of the change until the sale is complete or almost complete. This reduces the amount of time they have to speculate, and gives the new owner an opportunity to meet with them and explain what their goals are for the future and how they can be part of that future.
Reason #2: So your customers do not find out ahead of time. Often times customers, just like employees can go into panic mode as soon as they find out your business if for sale. They start assuming that the new owner will not do as good of a job, or they will raise the prices, or they will make some other change that will affect their business. Because of loyalty to you and your company, most of your customers will just throw marketing items in the trash when they get them in the mail because they already have you and do not need anyone else. Now, when they know ahead of time you are selling they may be more receptive to a low ball offer just to try someone new since you are not going to be around anymore. When done ahead of time, this can not only hurt your operating business, but also lower the sales price when it is time to sell because of lost revenue of those looking for someone new.
The person or company who is buying you out wants and needs every customer you have, and that is what they are paying you for. More importantly, let your customers vote with their wallets. If the new owners do a good job and take care of them, they will stay as a customer, if they do not, they will move their business to someone who does, but let them make that choice.
Reason #3: So your competitors do not know. You may not realize this but some of your competitors may not be as ethical or honest and you are ( BIG SURPRISE RIGHT??? ).
In the past, I have heard horror stories of competitors mentioning to customers how you are going out of business, and will not be able to service the new equipment you just quoted them on. Or seeing your employees at the supply house and mentioning that you were going out of business and if they wanted a job they better leave now and come to them. Obviously for reasons already mentioned both of these scenarios would be detrimental to your current business and possibly the selling price in the future.
In summary, I would strongly suggest not making your sale public information until you have already secured a buyer and have a plan in place for the transition, which may include not saying anything until the sale is over and the transition has taken place.
If you have any questions on selling your HVAC or plumbing company, please contact me at any time, I am happy to help out.
When you start to consider selling your HVAC company you will notice some large differences in sales prices on various size companies. One of the items that give a buyer a good feeling, and can often lead to a higher sales price is the number of Maintenance Agreements you have in place with your existing customers.
There are multiple reasons for this increase in value, or at least perceived value from buyers. One of the primary reasons, is the appearance of a loyal customer base. As you implemented putting agreements in place with your business, I am sure you noticed your overall sales volume has increased from these “loyal customers”. Studies have shown that customers with Maintenance Agreements were less likely to shop around when faced with a major purchase or upgrade, compared to those who were one time or casual customers.
You should have also noticed an increase in referrals from customers who you work with on a more consistent basis. As a buyer who is looking to not only purchase a profitable business, but one that shows consistent growth, referrals from existing customers will play a big part in that growth plan.
I am sure one of the reasons that helped you decide to create a Maintenance Agreement system in your business or has you considering to implement this strategy, was the consistency in income it creates during slower times. As a buyer considering acquisition in the industry, consistent income is highly sought after as often times they have debt service from the purchase they will need to account for.
What if you do not currently have a plan in place with customer agreements? Do not panic, it does not have to be complex. No matter how simple of a plan you have, it still ads value to the sale of your business as long as you have something in place. Not sure what the best way to get started implementing a service agreement strategy into your business, and you do not want to try it on your own? There are several companies that can provide templates for you to implement in your business that are used by other companies if you prefer not to implement something on your own.
Still on the fence about putting agreements in place? Here is a great article in ACHR News that explaines many of the benefits in addition to a higher sales price. https://www.achrnews.com/articles/126647-marketing-magic-what-will-maintenance-agreements-do-for-my-company?v=preview
Bottom line, one of the fastest ways to increase the sales price of your business, is to implement a Maintenance Agreement System that focuses on taking consistent care of your customers, while building loyalty and a predictable revenue stream.
We help people sell their businesses for many reasons; moving, downsizing, another opportunity, divorce, but much of the time it is for retirement. What ever your reason is for selling your heating and air conditioning company, you should begin with the end in mind.
When I meet with a seller, one of the first few questions I ask, is what does the check need to say for you to walk away? That usually causes a moment of silence, and for many, they come up with some multiple they heard from a friend, or something they read in a magazine. While it is good to have a benchmark, and as I have mentioned before we use them in establishing our price, you need to know for you, how big the check needs to be for you to say you are done with this chapter in your life, and it is time for someone else to take it over.
I realize that for many of you there are days when someone could have it for free, if you could just walk away, but when it is time to sell, you need to be compensated for what you have sacrificed and built.
Please keep in mind that there are many ways to value a business, but the most important needs to be what you can put in your pocket after it is done, and is that enough for you?
One of the first places to start with adding up items, is what does the business currently pay for that you will now need to pay out of your pocket? Cell phone, insurance, gas, vehicles, lunch and dinner, etc.. I would suggest looking at your bank statements for a few months, and see what are things that the business currently pays for that you will now need to either eliminate or become responsible for.
The next step should be, what do you plan on doing once the business is sold? Travel, move to a new town, or work on a hobby? Each of these things cost money, and now you will not have a business paying for them. You will also not be tied up working all day, and hopefully have the time, and money, to do the things you enjoy. Unfortunately I get calls from potential buyers who sold their businesses in the past, and did not budget enough money moving forward and now they are looking to buy a business to supplement their income.
The more planning you do prior to the sale, the more prepared you will be. I am happy to help you confidentially take a look at what your business is currently worth, and whether or not that will meet your needs, and what can be done to change that, just give me a call or send me a note.
One of the benefits of owning your own business is the ability to have the business cover some of your expenses that if you did not own your business you might have to pay yourself. I am not referring to anything illegal, I mean when you have a business meeting with prospects who are also friends, the business might pay for it. I mean the cell phone that you use for business purposes, or the truck you drive for work everyday.
When I meet with sellers and we review their finances I often ask for these “owners benefits” as they are often called. From time to time some owners, or their accountants, are fairly creative in what they classify as business expenses and it is difficult to separate those expenses out.
If you are looking to sell your HVAC or Plumbing company, put yourself in the shoes of the buyer. Obviously when selling you are looking to get the most you can for your business, but you need to be sure you have realistic expectations. If you have not been paying taxes on the income for 5 years, it is difficult to expect a buyer to add those back in to create a fair offer. I call it double dipping. If you came me looking to buy a business and I said, ” I have a great one for sale that shows $50,000 of profit on a tax return, but they really make $150,000 but I cannot prove it”. You would look at me like I lost my mind, and you certainly would not base your offer on what you cannot see or prove.
I have been self employed all of my adult life, and obviously have even owned a HVAC company, and so I realize completely there are some grey areas when separating expenses, all that I am saying is to be sure what you are claiming can be proven, or do not expect to be paid for it. One of the best things you and your accountant can do when planning on selling your business is to be sure your books and records are clean and up to date.
When working with buyers, a point that always needs clarification is what is included in the sale. Is your truck included? Your tools you have acquired over the last 20 years? Computers and tablets? More importantly, is accounts receivable going to the new owner? Have you addressed that in the asking price?
The more you know about what you are selling, not only will it be easier to determine your asking price, but will also help you when it comes time to negotiate.
I strongly suggest when you decide to list your business, that you have an asset list of what specifically is included, and note any major items that are not. It is much easier when working with a buyer who is trying to determine their fair asking price to specifically review those items so there are no questions. It can make for a bad situation when going through due diligence a buyer is informed that half of what he or she thought was included is not, and now they want to renegotiate the transaction.
Although creating this list is going to take time and energy, the frustration and sour feelings it will prevent will absolutely be worth it. Having this list will also allow you to assign a value to those items, for clarification in all marketing as well as determining the tax implications of the sale. It can be something as simple as a handwritten list of items with an approximate replacement value to a spreadsheet that includes those items, as well as model numbers and serial numbers.
The more information you have, the better it will be for both you and the buyer, as most attorneys handling the closing will use that list for a bill of sale receipt the buyer is going to want when they take over.