In many ways, selling your business is like sending your child to college. You’re saying goodbye to a piece of your heart. That piece of your heart will still be there, but not in the same way. It can often be an emotional process.
Hiring an HVAC business broker can offer you the perfect guidance as you make important decisions and ensure the business lands in the right hands while getting you a fair payout. However, not all HVAC brokers are created equal. Like any other industry, there are some scam artists whose goal is to get the better of you and your business. Be wary of those when looking to hire a broker. If an HVAC broker has any red flags, run for the hills. Here are the top warning signs that should get you lacing up your running shoes:
No Real Experience in the HVAC Industry
There are a lot of business brokers out there, but one specializing in selling chain restaurants may not be your best bet. Choose a broker specializing in the selling process of HVAC businesses—one whose extensive knowledge of everything HVAC will fill in the gaps for you as you have questions. Your business broker should have so much experience in your industry that they have a solution to every problem and an answer to every question.
They Don’t Belong To Professional Organizations
It should raise a warning flag if your broker doesn’t belong to any professional organizations. These help your broker stay current in the industry. These organizations can be an industry network such as Nexstar Network. Other affiliations that could earn the broker brownie points could be the Electric & Gas Industries Association (EGIA) or Service Roundtable. Being involved with a member network means they keep a pulse on the latest in the HVAC industry and build valuable relationships that ultimately drive business and expertise.
Never Tell You “No”
We all know the people pleasers who never tell their customers “no.” That policy may work in a restaurant where “the customer is never wrong,” but as an HVAC broker, sometimes saying no is necessary if it’s in your best interest. Of course, they should also explain their reasoning and discuss it with you, but a good business broker will tell you when a decision may not lead to the best outcome.
They Don’t Have Any Other Clients
Before hiring an HVAC brokerage, ask about their current clientele. They don’t have any existing clients? They aren’t in the middle of any deals? Why? The business of selling HVAC businesses is all about deals and pipelines. Brokers tend not to bet everything on one card. They work multiple sales at a time across various deadlines, and organization is integral to the process. While it may seem like you scored by being their only client, it’s a red flag.
Lengthy Listing Agreements
While many business brokers have listing agreements ranging from six months to three years, a trustworthy HVAC broker is willing to take the risk with the transaction because they are confident they will do an excellent job and get you the outcome you want. The longer the listing agreement, the longer you’re tied to that broker, even if you aren’t getting what you want. Be apprehensive of a year or more contracts or ones with hefty cancellation fees. Generally, a shorter listing agreement is more reassuring, and a no-fixed-term commitment is even better.
Zero Online Reviews Or Referrals
An experienced HVAC broker should love to hear from their clients about their experience, and plenty of testimonials should back up their work. If there’s no website or Google Reviews, something is shady.
Lacks Available References
Like the online reviews, any well-respected company that does good work should be proud and willing to offer you references so you can chat with those who have used them as a broker and ask about their experience. If a broker isn’t ready to do that, they either don’t have any or don’t want past clients to expose them. Referrals are important—a broker should be willing to provide them.
Relies On You To Drive The Valuation
An experienced broker will formulate a business valuation based on their research and expertise. If a broker asks for your thoughts on a valuation and seems to jump on board with whatever you say, that is a red flag. They might not have the required experience to efficiently and effectively support the sales process of your HVAC business.
Promises an Unrealistic Timeline
Even the simplest of HVAC acquisitions take time. The only type of broker who will promise to close the sale in days or weeks is one who does not know what they are doing.
How A Business Broker Helps To Sell Your Business
Now that you know some red flags to watch out for when hiring an HVAC business broker, let’s talk about some things a good business broker does.
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- Efficient Marketing Aimed At Your Industry
An experienced HVAC broker will help you create professional marketing materials in a format that buyers and inventors will respond to.
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- Gives You A Realistic HVAC Business Valuation
Your HVAC broker should be capable of giving you a realistic valuation range based on area and market.
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- Offers Resources And Relationships
HVAC brokers should have many industry relationships and connections that will expedite bringing the right buyer to the table.
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- Identifies Downfalls With Your Business
After a broker analyzes your business, they should be able to identify the challenges, strengths, and weaknesses to formulate solutions that will ultimately make your business more desirable to buyers or investors.
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- Provides Due Diligence And Negotiation Expertise
Some necessary processes of selling an HVAC business can be confusing and complex. Your broker should be able to take the reins, explain anything to you, and ensure a smooth process.
Hiring an experienced, knowledgeable, and trustworthy HVAC broker is well worth it. Just do your research, ask questions, and if a potential broker has any red flags, move on. It’s not worth it, especially when so many outstanding brokers will get you the desired results. Let’s chat if you have an HVAC business for sale and need a trusted broker.
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Infographic
Hiring an HVAC business broker can be helpful in ensuring a fair payout and finding the right buyer. However, some brokers are not trustworthy and may try to scam you. Take a look at this infographic to learn about warning signs when hiring a business broker.
