3 Factors to Consider When Selling Your HVAC Field Service Business

January 18, 2018
3 min read

The story has been the sa

me for decades. A talented technician with a dedicated client base leaves his job at an OEM to start a HVAC field service company. He plans to grow the maintenance contract base, with the intention of selling the field service business back to an OEM and “cashing out”. With service contracts worth 30-40x their cash flow, it seems like a sound strategy.  The problem is that often the business owner will have an overinflated view of what his company is worth, and how quickly he will get paid.

Here are 3 factors to consider if planning on selling your HVAC field service business:

1.      Profitability -Can you accurately prove the profitability and cash flow of the maintenance contracts? If your business management system does not properly allocate costs against the work orders and contracts, your valuation will be subject to discounting.

2.      Business process – Is your business dependant on manual processes from key administrative employees? While every successful business has key employees, if your business processes are manual or dependant on multiple disconnected software products, you will take a hit on the cost to transition your operation to something more streamlined. Buyers will also discount your valuation because you are not operating as profitably as you could be.

3.      Risk – If you are using manual or disconnected software systems, buyers will discount your valuation or lock you in longer to make sure that when they take over, there are no surprises that only the owner can deal with. Businesses with documented processes are a lot less dependant on the owner or the people who are loyal to him.

Business systems are not a substitute for quality staff and client relationships but they do take the guesswork out of valuating your business. Contractors whose operations systems are not properly connected to what is happening in the field or in the back office always pay a price when it is time to defend the value of their business. If your plan is selling your HVAC field service business one day, investing in a system now that shows you are in touch with and in control of your operation will help you realize a better selling price and a shorter transition commitment.

FIELDBOSS is a comprehensive HVAC field service software solution designed to continuously expose the vital signs of your business. If you’re thinking about selling your HVAC field service business, let us help you create a profitable business that will be appealing to acquisition candidates and sell quickly for an attractive profit. Contact us here.

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