Growing your HVAC business through a carefully executed acquisition can be an effective strategy. Every day, there are companies listed for sale because their owners are looking to retire, have a health condition, or are just bored.
Ambitious HVAC entrepreneurs can take advantage of these opportunities to geographically expand or acquire talent and equipment for a fraction of the price if they were to build on their own.
HVAC business broker Patrick Lange, with Business Modification Group, has seen companies do this hundreds of times. However, he cautions that pursuing growth through acquisition strategy is not for everyone. Ask yourself these 5 questions before moving forward with a purchase.
What systems do I have?
Any functioning company has systems that keep critical business functions on track. However, all systems are not the same and if you’re relying on paper, pencil, and your gut instinct to run your company, you may not be ready for an overnight expansion. Lange recommends leaning on technology to power business operations. Here is his suggested minimum. Do you have these systems?
- Customer Relationship Management (CRM)
Robust CRM’s like Service Titan and Housecall Pro keep track of which customers have their service coming up, along with the name, phone number, address, and schedule.
Use an online-based tool like Quickbooks or Peachtree to keep track of who owes you money and how much you are spending on salaries, equipment, and maintenance.
- Reputation Management
Have a plan to not only ask customers for their feedback but be able to respond quickly if someone posts a poor review.
Know how much it costs to acquire a new customer and how you do it. Whether it’s through online ads, postcards, or referrals, you will want to know your numbers to benchmark against the sale price of an acquisition.
The best organizations have a career path for staff. Through good performance, time on the job, and professional credentials, they can proceed through a career progression. Having established salary levels will help you integrate new employees and keep them happy.
Moving too quickly and acquiring another company can make the small problems your company has now into big headaches. Lange adds “I’m a big proponent of always looking for acquisition targets, but only when you are ready to do so. If you’re drowning now, the last thing you need is more water.”
If your systems are less than ideal, consider bringing in an operational consultant to help you fine-tune your business so you can expand and grow your profits.
After all, the whole goal of expanding is to generate more profit. Moving forward without a solid plan could have the opposite effect.
To view HVAC businesses for sale now across the United States, click here.
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 12 months and is currently the Vice President of the Business Brokers of Florida (North Florida District.)