Business for Sale: Established HVAC Contractor, Residential

Business for Sale: Established HVAC Contractor, Residential

Harvest Business Advisors is pleased to announce the sale of this Northern Virginia air conditioning and heating services company.

Congratulations to the new owners! Best wishes to the sellers on their next adventure.

The company services residential and multi-family customers in Northern Virginia, Maryland and Washington D.C.

Highlights include:

Established in 1977, this contractor is a factory authorized dealer for major air conditioning and heating system manufacturers.

The company is led by an experienced management team and has five 5 skilled technicians who are NATE and factory certified.

The company has approximately 900 recurring long-term services contracts and a system in place for nurturing customer relationships.

The main facilities are conveniently located, owned by the sellers, and are available for purchase or lease.

No additional capital investment needed to maintain high standards and continued profitability.

The company’s average 3-year revenue is $2.2 million.

Possible buyers could be in a related industry seeking growth/diversification opportunities with an established, successful company or an industry buyer who would like to expand their capabilities and service geography area.

Please Contact: Eddie Davis (EDavis@HarvestBusiness.com or 301-325-7687) to discuss this business in more detail.

Click here for a Non-Disclosure Agreement and Finance Document

Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to EDavis@HarvestBusiness.com.

We will then be able to discuss financial details and other confidential information about the business with you.


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.

Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

Business for Sale: HVAC Contractor, Northern Virginia

Business for Sale: HVAC Contractor, Northern Virginia

Harvest Business Advisors is pleased to present this Northern Virginia air conditioning and heating services company for sale.

The company services residential and multi-family customers in Northern Virginia, Maryland and Washington D.C.

Highlights include:
Established in 1977, this contractor is a factory authorized dealer for major air conditioning and heating system manufacturers.

 

The company has approximately 900 recurring long-term services contracts and a system in place for nurturing customer relationships.
The company is led by an experienced management team and has five 5 skilled technicians who are NATE and factory certified.
The main facilities are owned by the sellers, conveniently located (and are available for purchase or lease).
No additional capital investment needed to maintain high standards and continued profitability.
The company’s average 3-year revenue is $2.2 million.

 

The Ideal Buyer:
Either a industry buyer who would like to expand their capabilities and service geography or a
buyer in related industry seeking growth/diversification opportunities with an established, successful company.

 

Please Contact: Eddie Davis (EDavis@HarvestBusiness.com or 301-325-7687) to discuss this business in more detail.

Click here for a Non-Disclosure Agreement and Finance Document

Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to EDavis@HarvestBusiness.com.

We will then be able to discuss financial details and other confidential information about the business with you.


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

SBA – Women-Owned Small Business Federal Contracting program

SBA – Women-Owned Small Business Federal Contracting program

Harvest Business Advisors works with Small Business Administration (SBA) lenders for many of our transactions. Our entire team keeps up-to-date on all SBA programs and announcements to better serve our business brokerage clients and our business valuation clients.

We’d like to share this recent announcement from the SBA about their Women-Owned Small Business (WOSB) Federal Contracting program.

The federal government has set a goal is to award at least five percent of all federal contracting dollars to women-owned small businesses each year.

Joining the women’s contracting program means you are eligible to compete for federal contracts set aside for the program. (You can still compete for contract awards under other socio-economic programs for which your business may qualify.)

The SBA has made some changes to Women’s contracting program eligibility requirements and certification process that take affect this summer.

The eligibility requirements to qualify as a WOSB or an EDWOSB are fully defined in Title 13 Part 127 Subpart B of the Code of Federal Regulations (CFR)

You can also get a preliminary assessment of whether you qualify at the SBA’s Certify website.

In addition, soon it will be a requirement to be certified Certification as a WOSB either through a third-party or through the SBA’s FREE online certification at certify.sba.gov.

For the complete announcement from the Small Business Administration, please visit their website 

If you have any questions or need more information about SBA lending practices and requirements or a business valuation for a SBA loan, feel free to connect with us for a conversation.


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

Benchmarking in 2020 – Key Business Metrics to Monitor

Benchmarking in 2020 – Key Business Metrics to Monitor

As you start the new year, it’s advisable to pay attention to areas of your business to identify problems, resolve issues and measure growth.

Business owners at all stages should follow benchmarking practices – but owners considering selling their business soon or in the future should be especially vigilant.

Likely, you already track some performance metrics in your business, such as profit and EBITDA. While profitability and EBITDA are very important, there are others that many business owners overlook.

Let’s look at some metrics that are equally valuable.

Gross Profit Margin Per Revenue Source and Service

Business owners should review each revenue component whether it be products or services and analyze both the revenue and expenses associated with each. They should also really look at the 80/20 rule in terms of the gross margin per revenue or product.

When is the last time you really studied or analyzed each one of your product or service areas based up on gross margin contribution to the company – including all costs associated with each revenue source? Does a revenue source have disproportionate expenses?

Are these expenses worth the revenue that it brings into your company?

Are there expense components that can be bettered utilized in other parts of your business?

Studying your profit margins across your spectrum of products and services is crucial in bettering your company’s profitability.

Monthly Recurring Revenue Metrics

It is very important to the profitability and value of your business to provide services with monthly recurring revenue. If you do have recurring revenue, you should analyze the cost associated with that revenue (client acquisition, service expansion upgrades, client churn) and understand what percentage of your customers you are keeping, what percentage you are losing and why.

If you do not currently have services that provide monthly recurring revenue, now is the time to put creativity, thought and effort to develop that side of your business

Labor Loaded Gross Margin

If you are running a service business and you have a lot of clients, you need to examine the cost associated with generating gross margin.

Pay attention to which clients demand a disproportionate amount of attention and resources. By looking at profit margins you’ll be able to identify which clients are receiving too much time.

Effective Hourly Rates Spent Servicing Clients

It’s necessary to understand exactly how much it costs to service a client. Once you determine that figure, you’ll know whether you need to charge more. It’s certainly not a good business practice to lose money on a client.

If you can’t make money on the client, then you may need to fire that client or have a frank discussion with the client. So, calculate this metric for each client, analyze the results and increase your monthly fees when necessary.

Customer Contribution/ Client Concentration

While large and loyal customers are an asset to your business, customer concentration of too many large clients (in relation to your total customers) can be a red flag when you are raising capital to expand your business or selling your business. Keep track of customer concentration so that your customer portfolio is in balance and that your customers are evenly distributed across your customer base.

Client Churn Rate

How many clients do you lose each month? And why?

You should be tracking this statistic in your business. Some churn is inevitable but a sudden decrease in customers means you need to take a look at your business. Is it an employee issue? A product or services issue? Are you losing business to a competitor?

The sooner you identify the issue and act to correct course, the quicker your business will recover and rebound.

Employee Churn Rate

Your employees are your biggest asset.

Are you retaining employees? If you are not, why aren’t you?

Is it because of ineffective managers?

Lack of training? What can you do to better train your employees?

What can you do to cut down on this rate?

Are your compensation plans competitive? Are you rewarding and recognizing your employees?

How do your employees stack up against your competition?

Conversion Rate

How many client leads do you actually convert into new clients? Generating leads is great but a good conversion rate is critical to the success of your business. It’s also important to understand lead source and testing new lead generation strategies when necessary.

Return on Investment

Any time you spend money in your business should be done with the intention of calculating the return on both the soft (employees, etc.) and hard (actual cost of goods – equipment, software, web development, social media, online branding, supplies, etc.) to generate that income. Understanding this information – and making adjustments based on it – is critically important..

Conclusion

There are many metrics to choose from in running your business. The most important thing is to choose the ones that will benefit you the most in growing and maximizing profits for your business. And, in the end, using good metrics will pay off for you when its time to exit and sell your business. Buyers do pay more for well-run businesses with strong processes in place.

 

This article was written by Harvest Business Advisor Partner, Richard Stopa.


Clients choose Harvest Business Advisors for our accurate business valuations and our proven ability to deliver the highest price in the smoothest sale transaction possible. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

 

 

How are You Doing? Competitive Business Benchmarking

How are You Doing? Competitive Business Benchmarking

Previously, we discussed business benchmarking using internal measurements, tracking and analyzing 5-7 key indicators of your business’ growth and success.

Now, let’s focus on the second benchmarking measure – comparing yourself against your peers based on industry data.

The second form of benchmarking is to compare your business to industry data.

Industry data is available from many sources. The most available data is financial data from several companies that collect and sell the data to banks, accountants, and other advisors. Also, many industry trade associations collect and track much more detailed information. While not perfect, this data can provide a meaningful comparison for analysis on how you are doing. Often this data is sorted and available based on performance. For instance, companies can be sorted in the 25th, 50th, or 75th percentile of financial performance.

Since only half of all companies with revenues of $10 million to $50 million will sell, you want to compare yourself to companies in the 75th percentile or better. These are the companies that are performing well and are creating real value.

Your results will not mirror the industry data, but the data will be useful for comparison purposes.

For example, a drywall contractor may see that their cost of goods sold is 73% while the industry norm for companies in the 75th percentile is 70%. Yet overhead for the drywall contractor is 20% producing a 7% profit. The industry norm at the 75th percentile is 25% overhead and a 5% profit. In this case, profit is above industry norm.

Perhaps this contractor spends a little more on direct labor, but because they have better people they are able to perform with less oversight. If this is true, there is no reason to make a change based on the data. If not, perhaps the direct costs can be brought down. Perhaps better purchasing could reduce costs. Perhaps labor can be applied more efficiently. In all cases, do not use this data and analysis as a reason to rest on your laurels but as a process in order to find ways to improve.

Internal Benchmarking along with Competitive Benchmarking will help you adjust course to be as profitable as possible and identify areas for growth.

 


 

Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

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