How to Increase the Value of Your HVAC Business
If you’re wondering how to increase the value of your HVAC business, chances are you’re looking to sell—at least eventually.
When you leave the industry, retire, or start over with a new business, you could sell your company to get some value out from it. Many people may be interested in buying your company, including your competition, investors, or those who are considering opening their first HVAC business.
To maximize this opportunity, it’s wise to prepare your business and boost its value.
Here’s how you can increase the value of your HVAC business.
Start by Valuing
According to Peak Business Evaluation, HVAC businesses are one of the most sought-after businesses in the United States. Getting a professional business evaluation can help you get a sense of what your business could be worth and how your business compares to others. Professional valuations from HVAC business brokers should identify areas where your business does not meet buyer expectations, which you can then fix.
Sell Maintenance Plans
Even if you currently specialize in installation or repair jobs, you should strongly consider shifting your focus to selling maintenance plans. Monthly or yearly payments from customers help demonstrate that your business is stable and less vulnerable to seasonality—two big concerns people have when buying HVAC companies.
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Hire People with Your Skills
One problem with purchasing an HVAC company from an investor’s perspective is that they don’t have your skills. Will the business fall apart without the special certifications or experience you bring to the table?
To minimize this risk for your potential buyers, hire someone who has the same credentials you do. They can stay with the business, so it can still advertise that it employs someone with your specialization and still do the work you do now. Hiring him or her may be expensive, but it could significantly boost the value of your business.
Increase Your Volume & Service Area
If your business serves a wider area and has some brand awareness in these new areas, you can reach out to more potential buyers. Typically, people want to buy businesses that operate near them. Or, competitors may want to buy your business if you fill a gap in their current service area. Plus, selling your HVAC business to a national HVAC chain or to a big investor may not be possible unless you have a strong presence in your state.
Of course, when you increase your service area, you should increase your volume to match, as a business that has more customers is typically a stronger investment. You can increase both your service area and your call volume without increasing costs tremendously. Consider using a phone answering service, choosing cheaper bulk advertising methods, or reach out to a new segment of the market.
Don’t Start Buying Tools
One big misconception you might have about selling your business is that you’ll get a lot of money for the tools. Typically you will not get even near what you paid for your tools, and buyers will be reluctant to value even relatively new tools at a good price. If someone is buying a business, they are usually much more interested in your brand, customers and existing contracts than they are in your tools.
That’s why it’s wise to have professional guidance about what investors are looking for in HVAC businesses in your area, so you can increase your business’ value instead of wasting your time or money.
Take a look on how you can sell more HVAC maintenance contracts.
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