I guarantee you that right now, there’s an HVAC company owner somewhere in Northern Minnesota saying to himself, “Man… If my company was in Florida, I’d be able to sell it for twice as much and retire next year.”

But hotter isn’t necessarily better. There are plenty of other factors involved in making your company valuable, and most involve people more than climate.

First, let’s address the South, where I live, work, and swelter a good part of the year. Places like Sarasota and Miami only have one season  – summer – and people run their A/C all year round, both for climate and humidity control. The weather wreaks havoc on the units, so you’re going to repair or replace every eight to ten years. And that’s with regular maintenance.

But don’t forget that the H in HVAC stands for Heating. Companies in the north do A/C in the spring and summer and gear up for furnaces and fireplaces in the fall and winter. A northern business can be just as profitable and valuable as one located in the South. 

The real factor that determines a company’s value is demographics. It’s who you’re servicing, not where. The ideal location for an HVAC company is one where there is a high concentration of homes that have quality units (two-story homes may have as many as four units.) You’ll also be looking for families that can afford to buy quality and understand the value of ongoing maintenance. 

So you’re looking for larger cities with dense populations and well-off families who take care of their homes. That could be a location anywhere from Phoenix to Minneapolis. You’re more likely to grow your business in a bigger city, but you’ll also have more competition. Finding a mid-sized city where you can grow market share and fend off fewer competitors might be the right move for you, no matter where it’s located.

In the end, what creates value in a company is how profitable you are, and that’s about running your business right. Hiring the right people, running a tight operation, and building a reputation for fair and reliable service are what makes your company great. Stick with the basics, and don’t worry about where you’re located. 

 

About the author: Patrick Lange

 

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Patrick Lange is an experienced HVAC-specific business broker with Business Modification Group based in Horseshoe Beach, Florida. He has a unique background in financial planning and has even owned an HVAC business himself. This makes him well suited to working with some of the most successful HVAC business owners in the country. Specializing in companies with 1-10 million dollars in revenue, he maintains a network of buyers and sellers in the industry. He has sold more HVAC businesses than any other broker in the United States over the last three years and is currently the President of the Business Brokers of Florida (North Florida District.)