If you’re planning to sell your company within the next few years, there are some things you can do to increase its value and get the highest and best offers when you’re ready to list it:.
- Get out of the van. Hire and invest in reliable and skilled staff so you can focus on running and growing the business. No buyer has ever come to me and said that their dream was to work in the field 10 hours a day, then come home and do paperwork for five hours after dinner. They want a business, not a job. Make sure you have the right people in place, so you don’t have to micromanage or be involved in everyday decisions.
- Build your business based on service, repair, and replacement. Buyers are looking for recurring, predictable revenue. They look for companies that have a loyal customer base that trusts them to keep their system in good repair, fix it when something fails, and give them honest advice when it’s time to replace it.
- Clean up your books and records. Most HVAC owners are better at fixing systems than keeping records; that’s understandable. But buyers need to be able to read and trust your financial records. If your files are a mess, they’ll wonder if they’re seeing all the information—and how accurate it is. Many owners also run personal expenses through the company, which lowers their tax liability, but also lowers their profitability on paper. Take the personal charges off your books. Invest in dedicated accounting and customer relationship management software. Not only will it pay off when you sell your company, but you’ll also spend far fewer hours each month keeping the books.
- Focus on selling maintenance agreements. Maintenance agreements create predictable revenue year-round. They also keep your technicians busy during the off-season. When you visit your customers’ homes twice a year to ensure everything is running smoothly, you can identify and address repair issues before the system stops working. And you’ll be the company they trust to sell them a new system when the time comes.
- Stay away from new construction. New construction is almost always a race to the bottom. Developers and construction companies don’t want to invest in the best and highest-quality equipment for new homes. You’ll be installing systems that may not meet the family’s needs or the home’s configuration. Neither the builder nor the homeowner will have a relationship with your company; they’ll both be shopping around for the best deals on new systems, maintenance, and repairs. Smart buyers won’t seriously consider a business that relies heavily on new construction, no matter how profitable it is right now. They understand that a company’s real value is in its service, repair, and replacement business, and that’s what they’ll base their offer on.
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