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Posted (edited)

That seems like a really good business.

I went to high school with two dudes whose families owned HVAC/mechanical companies and knew the scions of a third.  All very well-to-do.  The two I went to HS with are aggot engineers, appropriately.  And two of them Jewish of all things.

Wife has been office/business manager of yet another one that's kept two generations of people in pretty tall cotton.  And theirs is a kind of typical goofy-ass family operation that drives my wife batshit.

Edited by TwiceHorn
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Posted (edited)
4 minutes ago, T’Boo Ted Marshall said:

Younger owner that had reached the limit of his skill set and needed some outside help.  

Is he still involved?  It seems important, in addition to having a group of decent technicians, to have someone that is kind of a natural engineer to sort of head things up from a technical standpoint.

Also, the head of company wife works for doesn't work for builders, even custom, says it's not worth the headaches.  And our builder says it's hard to find good contractors to do HVAC on custom homes.  I'm not sure what the ins and outs there are, maybe it's a business thing of being a subcontractor without the appropriate business skills.  But there's one contractor in North Dallas that seems to have something of a monopoly on that work.

Edited by TwiceHorn
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9 minutes ago, TwiceHorn said:

Is he still involved?  It seems important, in addition to having a group of decent technicians, to have someone that is kind of a natural engineer to sort of head things up from a technical standpoint.

Also, the head of company wife works for doesn't work for builders, even custom, says it's not worth the headaches.  And our builder says it's hard to find good contractors to do HVAC on custom homes.  I'm not sure what the ins and outs there are, maybe it's a business thing of being a subcontractor without the appropriate business skills.  But there's one contractor in North Dallas that seems to have something of a monopoly on that work.

Yes, I let him roll a small piece of equity to stay on.  

New construction is dicey.  You've really got to be in the pockets of the builder and you aren't doing much service work for a few years given the warranties.  On the converse you do have easy built in customers that you can go back out to and let them know you are the contractor that installed the system.  I don't foresee us playing heavily in that space anytime soon.  

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The margins are STUPID.....girl who use to work for me.  Her husband was a regional sales guy for an HVAC company.  They did the same.  No brick & mortar.  Very little overhead.  Can get units at cost.  They are going to do very, very well.

They have a single van/vehicle.  Her husband and brother are the trained labor.  Their mutual connections are bringing in business.  I wish I had done the same.  

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44 minutes ago, deadshank said:

Which manufacturer's are you a dealer for?  

How are you to ensure that the master license holder stays onboard? What are your plans if he doesn't?

 

Trane, Carrier, Bryant, Aaon, Lennox.  Most of the main players.

Some of the seller's value I tied to performance over the next 18 months.  I work in M&A and we've sold over a dozen HVAC's in the last 4-5 years.  I also learned quote a bit of the roll up strategy from PE firms that have done it.  If i need a GM/Tech or someone with a license, I can get one pretty easily.  I also had my attorney draw up a 60 day notice clause and if he leaves prior to that there is a monetary penalty.  

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I'm curious, do you have experience in the HVAC industry or just running a business. I used to sell into the commercial side, and the differences in profitability was insane. Obviously the chances of fucking up residential estimates, major job slippage on residential projects is smaller, but I would see contractors doing to 50-100 million a year in revenue make less profit than companies with much smaller run rates. There is definitely a right way and a wrong way to run those businesses. 

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I've owned a business prior and my work in M&A really opened my eyes to a lot.  I'm a good listener as well. My best skill set is putting the right people in the right place and holding them accountable.  

I have a current listing for a HVACR company that has multiple locations in Texas.  97% Commercial work.  They do about $8M per year in Gross.   I showed them they were winning bids, but losing at the same time.  They are less profitable than the HVAC I bought that does $2.5-$3M in gross on average so your point is exactly correct.  

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How far south of McKinney? Dallas residential?

Know several olds who were with Levy n SONS for decades before Service Experts bought them and fucked it up. Hope you are able to keep existing customers better than they did. GL!

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How far south of McKinney? Dallas residential?

Know several olds who were with Levy n SONS for decades before Service Experts bought them and fucked it up. Hope you are able to keep existing customers better than they did. GL!



We’ve gone to the HP and UP area plenty for both Residential and commercial work. What area are you curious about?
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11 hours ago, T’Boo Ted Marshall said:

I've owned a business prior and my work in M&A really opened my eyes to a lot.  I'm a good listener as well. My best skill set is putting the right people in the right place and holding them accountable.  

I have a current listing for a HVACR company that has multiple locations in Texas.  97% Commercial work.  They do about $8M per year in Gross.   I showed them they were winning bids, but losing at the same time.  They are less profitable than the HVAC I bought that does $2.5-$3M in gross on average so your point is exactly correct.  

Buy a couple of trailers for your workers and office and stick them in Aransas Pass or Ingleside.  Do work in Port Aransas. HVAC, plumbing, remodeling, whatever. Profit. These guys that are good down here are making a fortune because most of the trades and contractors are terrible.

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3 hours ago, justhookit said:

Buy a couple of trailers for your workers and office and stick them in Aransas Pass or Ingleside.  Do work in Port Aransas. HVAC, plumbing, remodeling, whatever. Profit. These guys that are good down here are making a fortune because most of the trades and contractors are terrible.

And salt air environment is really bad on HVAC equipment.  

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On 1/6/2021 at 2:35 PM, deadshank said:

Which manufacturer's are you a dealer for?  

How are you to ensure that the master license holder stays onboard? What are your plans if he doesn't?

 

The manufacturer piece seems to be super critical for HVAC.  TONS of benefit to alignment with a vendor from a pricing and consistency standpoint.

I stewed over the licensing aspect for a long time and opted for a plan similar to @T’Boo Ted Marshall for my electrician and my plumber.  Though, I think HVAC licensed techs may be easier to find as field workers from what I've seen.  Ultimately it boils down to three things:

-Make sure they're a good fit

-Treat them well

-Have more than one

We're paying for continuing education for one of our journeymen electricians (including his masters test) simply so that we can have a second master just in case.  If you're not the license holder as the business owner, I think it's smart to have two if you need one from a licensing standpoint.

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Congrats, man.  That's awesome.  You're gonna kill it.
Not sure if you can divulge, but I'd love to see the multipliers used for that calculation.  I just brought on a master electrician and I have a master plumber starting Feb 1.  Trying to figure out our strategy for HVAC to round out the MEP offering. 

The multipliers on the value of the company?

Where are your ops?
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