Selling an HVAC Business in Florida
A Guide for Florida Distribution Business Owners by Patrick Archer, MBA, CBI, CM&AP | Florida M&A Advisor | Calder Associates of Florida | 305.763.4112 (Mobile) 407.499.2855 (Office)
Selling an HVAC Business in Florida
Selling a HVAC Business in Florida is an important decision for owners of these essential business in the Sunshine State. The home repair industry is one of the most important contributors to Florida’s annual GDP which is fast approaching $1 trillion. Owners contemplating selling a Florida HVAC business must weigh the pros and cons of selling the business. Retirement is the primary motivating factor for most owners, while other owners may be planning to pursue new ventures in different industries.
Regardless of the motivations, sellers of HVAC businesses in Florida will want to package and price the business to stand apart from competing listings and attract potential buyers. Many of these buyers are looking to take ownership of a successful business in Florida and tap into the positive demographics, population growth, median household income and other trends benefitting Florida small business owners today.
Timing Considerations when Selling an HVAC Business in Florida
If you are the owner of a successful HVAC business in Florida, now could be a great time to take advantage of these trends and the rising demand among U.S. and international buyers for great businesses for sale in Florida that are established, profitable, “essential” in the eyes of local governments, and resistant to external pressures like recessions and online retailers.
Selling an HVAC Business in Florida today can also help sellers command top dollar considering the supply and demand imbalance of available HVAC businesses in Florida post-pandemic. While the pandemic wiped out thousands of small Florida businesses in sectors like restaurants, gyms and beauty salons, Florida home repair and HVAC businesses emerged stronger and more attractive in the eyes of their owners, their customers, and potential buyers.
The HVAC Sector in Florida
It should come as no surprise that the HVAC industry in Florida is one of the strongest HVAC markets in the United States.
According to the Bureau of Labor Statistics, Florida ranks #1 in the number of HVAC workers with 33,210 followed by California (32,410) and Texas (28,010). Florida also ranks #1 in the projection of states that will need the most new HVAC workers over the coming decade followed by Texas and California.
Demand in this already booming industry only accelerated following the Covid-19 pandemic in 2020, as more residents and companies fled the punitive tax regimes and failed anti-business policies of northern and Midwestern states like New Work, New Jersey, Connecticut and Illinois. New Florida residents are investing in major home improvements like new AC systems, while the growing population ranks mean more annual service contracts for Florida’s 8,109 HVAC and plumbing contractors.
“Florida ranks #1 on the list of states with the most HVAC workers”
Great opportunities abound for buying an HVAC business in Florida. Experienced HVAC business owners can tap into Florida’s lucrative market by acquiring an established HVAC business with a great reputation and hundreds or even thousands of annual service contracts in place with residential, commercial and industrial customers.
Skills needed to Operate an HVAC Business in Florida
As in all states, the HVAC business in Florida is highly competitive, and owners of the most successful HVAC businesses have many years of experience and hundreds of satisfied customers who depend on these companies for installing and maintaining the heating and cooling systems for their homes and businesses.
Current owners thinking of selling an HVAC business in Florida will want to know that potential buyers of the business have the operational knowledge, managerial skills and financial resources necessary to manage and grow the business for the next generation.
Most buyers of HVAC businesses in Florida will pursue SBA financing, and most SBA lenders will want to see that the buyer has some knowledge or relevant experience in the HVAC arena.
“SBA lenders will want to see that the buyer has relevant HVAC experience”
Ideally, a future owner of an HVAC business in Florida would already have several years experience as an employee or owner/operator of an HVAC business in their home state or home country.
Many owners of established HVAC businesses in Florida will only consider selling their business to a buyer who has a proven track record of experience in the HVAC industry or a related industry, either as an employee or an owner/operator of the business. Most SBA lenders will view potential buyers through the same lens of relevant HVAC experience and qualifications.
Best Cities For Selling an HVAC Business in Florida
For potential buyers open to living anywhere in the Sunshine State, sellers of HVAC businesses in Florida will be competing with other owners of similar business statewide. These buyers will be weighing several factors including a variety of demographic and quality of life metrics that will impact both their decision making process.
“Sellers of Florida HVAC businesses will be competing with owners of similar businesses statewide”
Florida’s population of 23 million is spread throughout the state’s 67 counties, but the largest clusters of high net worth households paying top dollar for HVAC services are concentrated in the southern half of the state along a ring of 14 coastal counties on the Atlantic Ocean and the Gulf of Mexico. This “golden horseshoe” of Florida demographics encompasses the 25 Wealthiest Zip Codes in Florida based on Average Gross Income.
“This 14-county coastal region is the Golden Horseshoe of Florida demographics.”
This coastal region extends from Tampa/St.Petersburg on the Gulf side, south to Naples/FortMyers and down to the Florida Keys, east to Miami/Fort Lauderdale and extending north through the coastal communities of Pompano Beach, Boca Raton, Palm Beach, Jupiter, Stuart, Hobe Sound, Port Saint Lucie, Vero Beach and Melbourne. Some of Florida’s largest and most profitable HVAC companies are located in this 14-county coastal region.
And, of course, no conversation about desirable areas to live and own a business in Florida would be complete without mentioning the Orlando metropolitan area. “The City Beautiful” is one of the fastest-growing metros in the country, and the influx of new residents creates ample opportunities for new and existing business owners.
“With over 2 million residents, Orlando’s economy is booming and increasingly diverse”
Long known as a tourism mecca and home to theme park giants like Disney and Universal, Orlando’s economy is increasingly diverse. And world class infrastructure improvements like the new $3 billion Terminal C at Orlando International Airport facilitates domestic and international arrivals and intrastate travel with the addition of Brightline, a high-speed rail link between Orlando and South Florida metros like Miami, Fort Lauderdale and West Palm Beach.
Median Asking Price of HVAC Businesses For Sale in Florida
Once you’ve decided on selling an HVAC business in Florida, it’s a good idea to work with a licensed Florida M&A advisor to get a better understanding of the current value of your business and a most probable selling price to qualified buyers business with some combination of cash and financing, either through an SBA loan, seller financing, a bank loan, a leveraged buyout, assumption of debt, or some other buyer/seller arrangement.
“The median asking price of Florida HVAC businesses for sale is $1,197,000”
The range of asking prices for Florida HVAC businesses for sale currently extends from $289,000 on the low end to $10,000,000 on the high end for Florida HVAC businesses generating over $500,000 in annual revenue and over $250,000 in annual cash flow.
Median Annual Revenue of HVAC Businesses For Sale in Florida
With the right team of talented employees, solid supplier relations and an established customer base, HVAC businesses in Florida can be great revenue generators for both current and future owners. According to the statewide database of businesses for sale in Florida, the median annual revenue of HVAC businesses for sale in Florida is $1,439,000.
“The median annual revenue of Florida HVAC businesses for sale is $1,439,000”
The range of annual revenue for Florida HVAC businesses for sale extends from $900,000 on the low end to $16,000,000 on the high end for Florida HVAC businesses generating over $500,000 in annual revenue and over $250,000 in annual cash flow.
Median Cash Flow of HVAC Businesses For Sale in Florida
Established and well managed HVAC businesses in Florida can produce significant cash flow benefitting both the current owner and future owners of these businesses.
“The median annual cash flow of Florida HVAC businesses for sale is $419,000”
According to the official database of businesses for sale in Florida, the median annual cash flow or owner benefit for HVAC businesses for sale in Florida is $419,000. As such, HVAC businesses in Florida enjoy a median cash flow of 29% of annual revenues. ($419,000 / $1,439,000 = 29%)
The range of annual cash flow for HVAC companies for sale in Florida extends from $253,000 on the low end to $1,867,000 on the high end for Florida HVAC businesses generating over $500,000 in annual revenue and over $250,000 in annual cash flow.
“The median payback period for a Florida HVAC business is 2.85 years.”
Based on these same numbers, the ratio of median cash flow to asking price for existing Florida HVAC businesses for sale is 35% ($419,000 / $1,197,000) which translates into a median payback period of 2.85 years.
Additional Resources for Selling an HVAC Business in Florida
Selling an HVAC Business in Florida is a major life decision that requires serious due diligence and sound guidance from an experienced and trusted M&A advisor.
If you would like to schedule an initial consultation regarding your Florida HVAC business, current valuation and next steps, please call us at 305.763.4112, schedule a free consultation, or use the contact form below.