I just finished speaking to the EverRest Group’s Second Annual Conference attendees in New Orleans, Louisiana. It is always exciting to share information on both buying and selling HVAC businesses to contractors who are eager either one day sell their business or purchase businesses to grow and expand.
In my presentation I highlighted the fact that with the coming of the age of the baby boomers, within the next three to five years there will be a significant over supply of businesses whose owners are interested in executing an exit strategy. According to one article I recently read, the demands for capital in these situations may outpace the available cash by 10x!
With a large number of businesses for sale (both within and outside of the HVAC industry) investors will have the option to pick and choose amongst the best businesses. What this means is only the best and well prepared businesses will have a chance to sell at fair market value.
I can not stress this point enough. If you expect to sell your contracting business in the next few years, start planning for the sale today. The best way to start planning is to understand the value of your business. Without an understanding of the value of your business, you can not make any real decisions on budgeting and timing.
There appears to be many contractors interested in buying competitors to add onto their existing market share or to expand into parts of the market where they do not have strong presence. Several contractors approached me after my presentation and ask me if I offer assistance in buying as well as selling. Assisting contractors acquire other contractors is one service I offer. My role in these small to medium transactions range from simple advice all the way through structuring the purchaser and due diligence. No project is too small and I can save my client many times over what I charge to assist.