What should I check before buying a fire extinguisher service business?

A portable extinguisher business is a route business. A technician visits many small premises, inspects each extinguisher, recharges or replaces what is needed, and tags it. That is different from an engineered sprinkler contractor, which the guide to buying a fire protection and sprinkler company covers. Here a buyer looks at the list of customers and at the people who visit them.

The customer list and the route

Ask for the full customer list with the date of each customer’s last visit and the date the next one falls due. A healthy route shows most customers coming back on schedule. Look at how close together the stops are, because a dense route costs less to drive. Ask who the largest customers are and whether any would leave if the owner did. Speak to a few, with the seller’s consent.

The van, the equipment and the stock

Inspect the service vehicle, the recharge equipment, the testing gear and the tags and labels on hand. Ask for maintenance records and for any equipment that is leased rather than owned. Count the stock of extinguishers, parts and recharge agents yourself, and ask how the seller values slow-moving items. Your accountant can say how stock should be treated in the price adjustments.

The technicians and their credentials

Ask what training and credentials each technician holds, who issued them, and whether they stay valid after a sale. Ask your lawyer or the licensing body whether the owner’s credentials move to you. Find out whether you or a key employee will need your own, and how long that takes. The authority that sets the requirements, and your lawyer, can confirm what applies. Ask whether the technicians plan to stay.

What to ask the seller

• Which customers renew on their own, and which need a reminder each cycle?
• Are any customers on written service agreements, and can those agreements be passed to a buyer?
• What complaints or missed visits have there been, and how were they handled?
• Who handles the insurance, and what claims history is there?