How To Sell an HVAC Company w/ Patrick Lange (He Has Sold Over 136 Heating & Cooling Companies!)
· Updated · Yash Singh
Patrick Lange from Business Modifications Group has sold 136 HVAC companies. In this episode of HVAC Hotshots, he breaks down what actually determines the value of an HVAC company, why maintenance agreements and marketing systems matter to buyers, how SBA financing works for both buyers and sellers, and the biggest mistakes owners make when trying to sell a business they never planned to sell.
Introduction
Most HVAC owners never plan to sell. Something forces their hand: illness, age, divorce, a key employee walking out. Then they spend their last months playing catch-up trying to get things in order. Patrick Lange has watched this happen 136 times.
Patrick is the founder of Business Modifications Group. He spent years as a generalist broker selling bars, restaurants, gas stations, and flower shops before buying an HVAC company he had listed, running it for two years, and then selling it. He discovered that if you were doing $20 to $30 million in revenue, everyone wanted to help you sell. If you were doing $2 million, almost no one specialized in your situation. Six years ago he made the switch exclusively to HVAC, plumbing, and electrical companies on the lower end of the market.
This episode covers what buyers look for, how to build more value before you go to market, what SBA financing looks like, and the mistakes that kill deals. Keep reading.
What Actually Determines the Value of Your HVAC Company
HVAC businesses sell for anywhere between 2x and 10x earnings. The range is wide because the factors that influence the multiple vary significantly company to company.
The things that move the number up: the size of the business (larger companies command higher multiples), systems and documented processes, marketing presence and reputation, profitability, people in place, and whether the business can run without the owner stepping in every day. “Anywhere in that range, focusing on those items is going to slide you from that 2x to the 10x and anywhere in between.”
Marketing is one of the first places a buyer looks. “One of the first places a buyer is going to look when they find out the company’s for sale is online. What’s the market saying about them? Do they have a lot of Google reviews? Are they positive? Can people find them? Are they dominating their area or are they hard to find?”
Patrick’s illustration makes this clear: a company doing more revenue through offline channels like door knocking and direct outreach versus a company doing less revenue but dominant online, with consistent lead flow through SEO and Google. The second company has more repeatable, transferable marketing built into the business. A buyer is acquiring a system, not just a track record.
Asset sale vs. stock sale. Almost everything Patrick brokers is an asset sale: the buyer purchases the name, phone number, website, customer list, trucks, and equipment but not the corporation itself. Stock sales, where the buyer acquires the corporation directly, are rare due to tax and liability considerations.
How to Build More Value Before You Go to Market
The single biggest mistake Patrick sees is reactive selling. “Not planning it right. Something brings it on, whether it’s age, a key employee leaving, a divorce, or an illness, and they hadn’t thought about selling. So now they’re trying to play catch-up.”
Building a business to sell is a different mindset from just running a business. The targets are the same things buyers evaluate: clean books, documented systems, recurring revenue, and a team that operates without the owner in the field every day.
Clean books. Remove personal expenses from the business. Make it easy for a buyer and their accountant to see exactly what the profit is. Messy books slow down deals and reduce buyer confidence.
Service, repair, and replacement (not new construction). New construction revenue is tied to market conditions and builder relationships that don’t transfer cleanly to a new owner. Buyers want recurring service customers with an established relationship to the company.
Maintenance agreements. Patrick calls these a high-priority item for buyers. “If you have a high concentration of maintenance customers you’re typically able to spend less money on marketing because you have more sales opportunities inside the customer’s home.” Two visits a year means two opportunities to deepen the relationship, identify needs, and earn trust. “They’re paying for their own loyalty. When something goes wrong, they’re going to call you first.”
A strong maintenance base also means more predictable recurring revenue: exactly what buyers are looking for when they evaluate whether a company’s income will hold after the ownership transition.
The $1 million threshold. Most HVAC owners hit a ceiling because they will not get out of the van. Below a million in revenue, the owner is often still doing the field work, which means a buyer is buying a job, not a business. “Buyers don’t call me looking to buy a job. They’re looking to buy a business. Getting above that million dollar threshold is so important before you consider looking at selling.”
The Sale Process: Timeline, SBA, Employees, and What Kills Deals
Timeline. A typical sale takes around six months from the decision to sell through to closing, though this varies widely. Some deals find a buyer and close quickly. One Patrick mentioned took nearly a year to find the right buyer and get financing in place. Once a buyer is identified and basic terms are agreed on, closing takes 60 to 90 days.
SBA financing. The Small Business Administration has been very active in the trades. In today’s market a buyer can typically get in for 10% down, with SBA financing the remaining 90% over a 10-year loan term. Sometimes the seller holds a small note as part of the deal, but the capital required to enter is relatively low for what is a cash-flow business. “It’s a great opportunity to get involved.”
Employees. Patrick does not tell employees about a pending sale until the transaction is complete. The reason is practical: employees panic and imagine worst-case scenarios when the reality is that buyers are purchasing the business specifically because of its employees. “I’ve sold 136 heating and air companies. I’ve never had a buyer come in and get rid of employees. They’re buying the employees because the employees are the ones that do the work and generate the revenue.” Once the deal closes, the conversation becomes: “I’m retiring. Here’s the new owner. Here’s what the opportunities are.” That is a very different conversation than speculation during an uncertain process.
What kills deals. The most common deal killer Patrick sees is owners who take their foot off the gas once the sale process begins. A buyer who is 60 days into due diligence will ask to see current numbers. If those numbers have declined because the owner stopped paying attention, the buyer gets nervous and may walk. Keep running the business as if the sale is not happening.
Brokers, Private Equity, and Getting the Right Buyer
Do you need a broker if you’re already getting offers? Almost certainly. The issue is not whether you have interest. It is whether you know if the offer is good. “Most sellers don’t know what their business is worth. So if they’re getting offers, they don’t know if it’s a good offer or a bad offer.” For most owners, selling the business is the single largest financial transaction of their life, and they will only do it once. Having someone with 136 completed sales on your side is a different kind of preparation than negotiating blind.
When choosing a broker, Patrick says trust and relevant experience are the two things that matter most. His own positioning is unusual: he has owned an HVAC company, bought one, run one, sold one, and then brokered 136 more. “I got a different view than somebody who’s never done it.”
Private equity. PE was extremely active in the trades for the last three or four years. Patrick is seeing more individual buyers now, though PE is still present. His advice: do not treat private equity as a monolith. There is a wide range of PE buyers. Some prioritize culture and long-term team retention; others are focused primarily on the bottom line and an eventual resale. Sellers are in a strong market position and can afford to interview buyers. “Finding the best fit for you and for your business is more important than just taking the offer.”
The bottom line from 136 transactions: plan early, build for a buyer, keep running the business well until the ink is dry, and have someone in your corner who has been through this before. Book a free TradeOps strategy call to think through how your business is positioned right now.
FAQ
What is the typical multiple for selling an HVAC company?
The range is 2x to 10x earnings, depending on size, profitability, systems, marketing presence, and whether the business can operate without the owner. Larger companies with documented processes, strong online reviews, and recurring maintenance revenue trend toward the higher end of the range.
When should I start planning to sell my HVAC company?
As early as possible. Patrick's consistent advice is to build the business with a sale in mind from the start, which means cleaner books, stronger systems, more recurring revenue, and less owner dependence. Waiting until a life event forces the sale almost always means leaving money on the table.
How does SBA financing work when buying an HVAC company?
The SBA has been active in the trades. Buyers can typically get in for 10% down, with SBA financing the remaining 90% over a 10-year loan term. The seller may hold a small secondary note in some deals, but the total capital requirement to acquire a cash-flow business is relatively low compared to the asset being purchased.
Should I tell my employees I'm planning to sell?
No, not until the deal is closed. Employees tend to assume the worst when they hear the business is for sale. In Patrick's 136 transactions, no buyer has ever come in and eliminated staff. Buyers are specifically acquiring the workforce. Waiting until closing allows you to frame the change positively and accurately.
Do I need a broker if I'm already receiving offers?
Yes. An unsolicited offer only has value if you know whether it is a good one. Most owners are selling their business for the first and only time, which means they have no reference point for market value. A broker with relevant transaction history can quickly identify whether an offer is reasonable, negotiate on your behalf, and bring more competing buyers to the table.
Related: TradeOps plans and pricing.
