Many owners of small businesses wind up selling their HVAC business at fire sale prices because they failed to plan for the eventual sale years in advance. This can result in you receiving far less than what your company is worth, and in turn will leave you with a much smaller nest egg for retirement. This article is designed to help you avoid such a fate by understanding how to maximize your companies value before you decide to sell it.

Getting an accurate estimate of your Selling HVAC business worth can be difficult, but there are several factors that you should consider. Generally speaking, buyers are willing to pay for a business that earns them somewhere between 2.5 and 3 times their net profit. This multiple is called a “Seller’s Discretionary Earnings,” or SDE. In order to improve your chances of achieving this number, you should be working to diversify your revenue streams in the long run.

This may mean adding more residential customers to your client base, for example. Diversification can also increase your profitability in the future, because it will give you more recurring revenue from annual maintenance contracts. By increasing the overall profitability of your company, you can significantly boost its value before putting it up for sale.

Another thing you should do is to get your books in order, especially the prepaid accounts, inventory, and other assets. You should have these in order before you start trying to sell your business so that you can answer any questions from prospective buyers about the company’s financial standing. This will also help ensure that you are not selling your business at a loss.

If you are serious about selling your HVAC business, it is a good idea to work with a business broker. They can help you set a price for your business, and also serve as a third party to speed up the due diligence process. A specialized business broker can also help you find the right buyer for your business.

You should also prepare your staff for the upcoming changes. Keeping them informed and loyal to your company will go a long way in ensuring that you are able to sell your HVAC business for its full value.

There are many other factors that could influence the value of your HVAC business, but the three mentioned above are some of the most important things to look into before deciding to sell. By doing the above, you will be able to increase your chances of receiving the highest offer for your company. If you are serious about selling your HVAC business, be sure to contact a specialized broker to assist you in the process. They will have the connections and expertise to ensure that you get the best possible price for your business.

Maverick Business Advisors 6401 Eldorado Pkwy STE 109, McKinney, TX 75070