COVID-19 and the softening economy have disrupted many businesses, and some industries have been hit harder than others. Travel, entertainment, and restaurants have been heavily affected, but other industries have performed reasonably well.
Some businesses provide products and services that customers consider to be essential. Grocery stores and big-box retailers have maintained sales, and so have repair firms and services, including plumbing and HVAC businesses.
Plumbing and HVAC businesses are attractive to buyers, because homeowners and businesses consistently need plumbing repairs, regardless of economic conditions. Plumbers that provide great service can generate repeat business.
If you’ve grown a plumbing or HVAC business and are considering a sale, work with an experienced business broker at NJ Broker Plus. Running your operation, and the added burden of selling your business can be difficult to manage. A professional business broker can help you complete these steps to sell your plumbing or HVAC business.
Preparing for Sale
The most attractive companies have documented systems in place that a new buyer can use to operate the business. Make sure the following 3 areas of your business are well organized and you’ll save time as you manage your business while establishing an easier transition to the purchaser.
Accounting Software
You can save time and increase accuracy using accounting software, and software makes it much easier to generate financial statements.
Payroll
Use a payroll company to process payroll. You can generate reports from your accounting system, and send the reports to the processor automatically.
Invoices
Use software to generate invoices, and track incoming payments on a timely basis.
Uncovering Company Value
Discuss your entire business with an NJ Broker Plus business broker in order to uncover the true value of your company. When you dig into the details, you may find business traits that are attractive to a buyer, but not immediately apparent to you.
Finding Qualified Buyers
Plumbing and HVAC businesses are attractive to buyers, and you may have attempted to sell the business on your own. Many owners find that they waste time with potential buyers who don’t have the financial resources to make an offer. Your time is limited, and finding out that someone isn’t a serious buyer is frustrating.
Business brokers at NJ Broker Plus have a network of pre-screened and vetted buyers, who have the financial resources to purchase a business. When a business broker works on finding a buyer, you’ll save time and find a purchaser for your business much faster. Most importantly, your business broker will make sure a potential buyer has the financial resources to buy your business.
Managing Due Diligence
When an NJ Broker Plus business broker finds a qualified buyer who is interested, they will help you prepare for the due diligence process. Business brokers know the records that are required, and they can help you gather and review your documents. The business broker will also have the purchaser sign a non-disclosure agreement before any records are shared.
Owners who attempt to sell a business on their own are often frustrated by additional records requests and your business broker knows which requests are reasonable, and they can follow up with the purchaser.
Valuing the Business
What is your plumbing or HVAC business truly worth? The value is a key factor in negotiating a sale price. The experts at NJ Broker Plus can provide you with a broker opinion of value This is an unbiased process that removes subjectivity from the valuation and reflects your company’s true worth.
A large portion of your plumbing company’s value is the loyal customer base that drives repeat business. A plumbing business also includes vehicles, tools, equipment, and possibly real estate (company office and warehouse). It’s important to consider the following factors when valuing a plumbing business.
Staff
The expertise of your plumbers and the time they have been at your company has a huge impact on customer satisfaction, along with your office support staff. The key to customer happiness and repeat business begins with the happiness of your employees and their willingness to stay on under new ownership. It’s beneficial to prepare a staff member into a manager if there is not already one in place.
Licensing
Every town and city requires plumbers to obtain licenses or permits to operate. If you maintain compliance with each town and city, the buyer can take over the business with less required paperwork.
Founder Involvement
If you have reliable staff and good systems in place, the business can be smoothly transitioned to the new buyer. Buyers look for a true turnkey business and are willing to pay top price for these types of businesses.
Some Advice From an Expert
This is best-practices for selling a plumbing & HVAC company. These answers and insight can help you make a more informed sales decision.
Q: How do You Know When it’s the Right Time to Sell a Plumbing Company?
A: When you no longer enjoy what you do
Q: What Should You Highlight When Selling a Plumbing Business?
A: The number of maintenance plans, average ticket sales price, number of customers in the database with good contact information, the average cost per lead, and revenue from repeat business
Q: What Can Plumbing Business Owners do to Stand out From Other Sellers?
A: Have an outstanding customer service strategy.
Q: Would You Recommend Using a Business Broker When Selling a Plumbing Business?
A: Yes. It is incredibly complex to buy and sell a business. You need to have an experienced, seasoned professional to guide you and help you to earn the most amount for your business and ensure that all processes and procedures are followed.
Q: Do you Have Additional Advice for Anyone Trying to Sell a Plumbing Company?
A: Meet with a business broker 1+ years prior to the sale so that you can understand the evaluation and to learn the areas of your business that may need refinement or adjustment prior to the sale in order to obtain maximum value.
Sell Your Plumbing Company With a Trusted Advisor
Select experts and trusted advisors to help you in other areas of your business, and an NJ Broker Plus business broker can be your trusted advisor throughout the sale process
We are here to help you sell your business. Contact us today to put our years of experience to work for you.
