Don’t Mistake a Bull Market For Brilliance When Buying or Selling a Heating and Air Company. 


HVAC Owner Pro Tips

When people are looking to sell or buy a heating and air business, oftentimes they do not know who to work with, or what numbers are important to look at.  Because of that problem, they work with the wrong people or look at the wrong numbers.

A common term in the financial world is, “Don’t mistake a bull market for brilliance”.  Meaning, do not think your stockbroker or the company is doing great because of decisions they have made, during times when everyone is doing great. That same feeling can be applied to buying or selling a heating and air business. Here’s how the term bull market relates to the HVAC business.

Over the last few years, things have been very good for both the HVAC industry, as well as the business for sale industry.  Unfortunately, during these good times, just like in the stock market, people mistake a great market for a great company or a great broker. There are some things I can suggest if you are looking to buy or sell a business, of the broker as well as things to ask about the company you are looking to buy. 

Let’s start with those who are looking to sell a heating and air business, and some great questions for you to ask your potential broker:

  • How many heating and air businesses have you sold in the past?
  •  In the last 12 months, how many have you sold?
  •  How do you plan to market my business that is different than what every other broker is doing?
  •  Do you have a buyer list of people who are interested in buying HVAC related companies?
  •  How do you determine where we should price my business?
  • Do you have companies like mine that you have sold for around that price range?
  • Do you co-broke? Meaning do you promote my business to other brokers across the country so they can help bring a buyer to the table?

Now for those who are looking to purchase, some items you should ask either the broker or the seller:

  • How did you come up with the price?
  • Do you have comps that show similar companies that have SOLD at that price? Not for sale but have sold?
  • Please show me your numbers year to date versus last year, year to date
  • Please show me your numbers since March 1st until now, for this year and last year
  • The previous two questions will show you how they have been impacted by the virus
  • How has your staffing changed over the last three months
  • What percentage of your business last year came from maintenance agreement customers

“Don’t mistake a bull market for brilliance” in the HVAC business. Once again, we have been very fortunate for the economic environment that we have had in the last few years. Make sure whether you are looking to buy or sell, that you are positioning yourself for success in whatever the future may hold.