Business for Sale, Would I Buy It? | Plumbing and HVAC

In today’s version of “Would I Buy This Business”, we have a seasoned plumbing and HVAC business. So in general these are good businesses because the demand is never going to go away. And it’s not going to be replaced by Amazon, right? Amazon is not going to drop by your house with an HVAC unit that they’re going to just drop off and somehow it’s going to be magically installed. Robots are probably not gonna take over this job anytime soon. So it’s a good long-term business. There’s a huge demand. The world’s only getting hotter so there’s going to be more and more HVAC needed in the world, even in places that didn’t use to need HVAC. I live in San Diego, and for years I never had air conditioning, never needed it. And in the last 5 or 6 years more and more months of the year now, we’ve had air conditioning on at least some part of the day or night. Never used to be the case but you know, now we’re consumer air conditioning, never used to need it. So I think that’s gonna be only more and more common as time goes on.

So I think it’s generally a good business. This one, so they’ve got sales of [2,132,007] which is a pretty good size. Cash flow [458,750] so it’s about 25% profit margin. That’s okay, I’ve definitely seen ones with higher profit margins. So this one may have some room for optimization if you get into it. And the asking price is a pretty reasonable 1.1 million, so just a little over a 2x multiple, which a lot of times these businesses are 3x or more. So I would say all things considered that’s a pretty good price for this business. It was established in 2000 so it’s been around a quarter of a century which is good news too. If it’s only been around a few years you don’t really know how well it’s going to hold up but this one’s been around since 2000. So definitely a good business worth considering. Good price. They don’t say what furniture fixtures and equipment value is included but presumably, there’s a few trucks, some tools, and whatever that comes with. It also helps offset some of the cost. Definitely would be financeable by the SBA as long as their numbers hold up. So you could get into this with as little as 100,000 to buy a business doing over 2 million and netting almost 500,000. That’s a pretty good return on your investment. So definitely, if this was a space I was looking to get into this would definitely be one I would consider. And what I would think about doing is just buying one and then buying another one buying another one in the same general geographic area and just rolling them up and benefiting from economies of scale and turning into a really solid business.

Here’s a little about this series. CapForge’s owner and founder gives us a little behind-the-scenes on what a good or bad business would be. CapForge helps tons of clients either buy or sell business and Matt was a business broker before starting CapForge. Let’s look at some of these businesses for sale and see if Matt would be interested in buying them.