What to Know Before Buying an HVAC Business

Why Buy an HVAC Business?

Buying an HVAC business can be a great way to become a small business owner. There will always be a client base, the service is in demand, and the field has the potential to be lucrative. However, what comes along with such a promising industry are some barriers to entry that may make acquiring an HVAC business difficult for inexperienced entrepreneurs. At Unbroker, we aim to help entrepreneurs navigate the purchasing process for an HVAC business and bring exposure to a growing industry.

Key Questions to Ask Before You Buy

What Am I Actually Buying?

The first question to ask when acquiring an HVAC business is: What am I buying? In most sales, the previous owners will sell the equipment and inventory along with the business. These sales are more attractive because they reduce startup costs. When looking at businesses for sale, it is in your best interest to avoid ones where equipment and inventory are not included. Unless the buyer has prior experience in the HVAC industry, purchasing new equipment can be a difficult and time-consuming process—taking away precious time where the business could be generating income.

Will the Employees Stay?

The next important question is whether the existing employees will remain with the business. The most valuable part of an HVAC business is its licensed employees who perform installations and maintenance. Without them, the business cannot and will not operate. The number of licensed HVAC professionals leaving the industry is far greater than the number entering, making recruitment incredibly difficult. That’s why Unbroker recommends prospective buyers look for businesses where employees intend to stay. Having existing employees ensures the business can continue operating during the ownership transition—providing immediate cash flow for the buyer.

Are Supplier Relationships in Place?

Another important consideration is whether the business has existing relationships with suppliers. Achieving scale in the HVAC industry often depends on the ability to purchase units at lower costs in higher volumes. Without established supplier relationships, it can be difficult for new owners to realize strong profit margins. A business cannot expect to scale without improving margins as it grows. Unbroker recommends that prospective buyers prioritize businesses with supplier contracts already in place to support strong unit economics from day one.

What’s the Relationship With the Seller?

Lastly, it’s important to build a strong relationship with the previous owner(s). The nature of the HVAC industry requires business owners to have deep, hands-on knowledge of operations. Many insights can only be learned by working the job or with someone who has. This also helps in preserving company culture and client relationships. Before purchasing a business, prospective buyers should get to know the current owner well. In some transactions, the seller may stay on for 6–12 months in an advisory role, helping the new owner learn the ropes. By doing this, the new owner can gain the trust of both employees and customers while familiarizing themselves with operations. Unbroker strongly encourages buyers to maintain cordial relationships with sellers throughout the transaction.

Final Thoughts

For those new to the HVAC industry, buying a business can be confusing. It can be hard to know if a deal is too good to be true—or if hidden liabilities are being acquired. When evaluating a business, make sure that equipment and inventory are included. Verify that some licensed employees plan to stay on. Ensure supplier relationships are in place to support scale. And finally, cultivate a strong relationship with the seller to avoid unnecessary hiccups.

By focusing on these key factors, buyers can acquire a strong HVAC business—and set themselves up for lasting success.