The technology of indoor and vehicular environmental comfort, called HVAC, and the companies which applies it are usually very profitable businesses, as most of HVAC businesses are very large ones.
Because of that, those are not easy businesses to run or administrate, so when it comes to make the correct valuation of an HVAC business, owners have to be aware of lots of different aspects that can make their companies worth more.
Usually HVAC businesses owners get a very good amount of money from their businesses sale. Check out the next topics and find out how to value your HVAC and how to sell it for the best price.
What is your HVAC business worth?
In order to know what your business is really worth, you have to gather all finance information you can find from the past years and compile into a report. Your potential buyers will probably ask for a complete report with numbers that justify the price you are asking.
Take a look at these metrics and make sure you put all information required in the report.
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a HVAC business worth more?
Don’t set your asking price before knowing which aspects can make your business worth more. How many employees do you have, what is your business size, where does it located, if there are more offices around the country, if you count with up-to-date technology.
Make sure you answer all the questions and cover all aspects from the metrics below:
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
- Growth potential
What does the average HVAC business sell for?
There has been exactly 100 HVAC business sales in the past ten years in the United States. Average sales price in this period was $779k, a very large number, and average multiple rate was 2.3, what is expected for large businesses like that.
What is the most frequent deal size?
Most frequent deal size is $1,2 million, which shows how valuable a HVAC business can be, as most of those businesses sales were millionaires.
Is the HVAC market getting bigger?
2015 and 2014 were good years, with a very similar total transaction value, but there has been better years in the past, such as 2007, 2008 and 2011.
It’s not correct to say that HVAC market is getting bigger, but it’s okay to say that it is living a very good moment and it’s a great time for you who is thinking of selling it.
Are bigger businesses worth more?
Yes. The bigger HVAC business is, the higher will be the deal size and the profit from your sale. Take a look at 2015 numbers, for example:
With very few exceptions, the rule “bigger the business, better the multiple is” can be applied in here as well.
What states have the most HVAC business deals?
Are you wondering where the most deals were made throughout the country, or if your state has a hot market to sell fast? As you can see if you are located in Florida, Arizona or Texas, you may get a lot more offers than if you are in Indiana or Minnesota. But sometimes you can overcome the low number of deals with investors or competitors looking to enter a specific new area, and get lucky with an offer.
Why would you sell in the first place?
The reason to sell always varies from each person. Maybe you are looking for new challenges, businesses and opportunities, or you just want to enjoy your family and retire. Although it can seem tempting to get your hard worked cash, make sure that you are clear on the motives so you don’t regret afterwards.
How long will it take to sell your HVAC business?
If you have read all the necessary steps to understand your valuation, and think you have focused on all the topics that make your company worth more, it is maybe time to start the process. Selling your business is a long-term process, and doesn’t happen overnight. Usually companies sell in 12 months, but you can also see deals getting closed in 6 to 9 months depending on the opportunity.
What is the process of selling your HVAC business?
This step by step process will help you get less confused when you make sure you are ready and confident to let go of your business, and perform a nice and positive sell. Many entrepreneurs forget about a step, or just don’t have the right guidance to know all the stages necessary and get lost through the process. Don’t forget to go through all of these, and if you have any questions, comment at the end of the article or contact us for more help.
Who will buy your business?
If you are wondering about the buyers that can be interested in your HVAC, don’t worry, there are many options and possibilities. From First Time entrepreneurs, to businessmen interested in new opportunities, the chances are that in the HVAC industry it may likely be a person who already had a store in the field.
HVAC business are very profitable, especially if you know how to sell yours for the best price. Make sure you cover all aspects that justify a great asking price.
If you want to start accelerating your buyout process, fill out our free valuation form and get your business valued today. Leave your comments on any doubts or feedback, we are glad to hear your thoughts.