Brian Barquilla, of BuildMyReputation.com and Patrick Lange of Business Modification Group chat about buying somebody else’s HVAC company to fast forward your own company expansion.
- What to look for in an acquisition target
- How the seller should be involved after the sale
- How to finance the deal
And more! It’s all discussed.
Is now still a good time to take risk and buy an HVAC company?
Absolutely, I 100% believe so. we’ve had businesses sell throughout the spring and early summer. It hasn’t let up. In fact, we are seeing more activity as of late.
Many of these companies haven’t suffered a revenue drop at all. heating and air companies aren’t recession-proof, but not as impacted as other industries. People still want cold and warm air.
How do companies typically expand? Geography-wise.
It varies. It depends where you are and what you are looking to accomplish. Are you planning on keeping the name or an extension of your own brand?
Is there an ideal size company to target?
If you are looking just to add customers, just a guy in a truck can be a good choice. However, if you are looking to go 80 miles away, that same size customer won’t work as well. You start running into logistical and management issues.
Buying a company for their talent is a good reason right?
We see that alot from bigger companies. In this industry, if you control the problems around the workforce, you can dominate the market. Well qualified HVAC techs are hard to come by. Turnover is high in this industry. It’s expensive to hire and train so if you are able to buy a company that already has happy and productive employees, it can be a great situation.
How is the seller involved post-closing?
I advise buyers and sellers to not agree to long term commitments. You may learn that the previous owner was the one holding the business back. Regardless, I like to build in about a month of transition time so that it shows the employees that they believe in the new owner. At the end of that time, the two parties can decide when and if they want to move forward.
How do you find great companies for sale?
BusinessModificationGroup.com is a good source. So isBizBuySell.com. You can search by keywords and go from there. I can help anyone interested analyze the different opportunities.