Why does an HVAC company’s busy season matter when I time my purchase?
HVAC income and workload swing with the weather, so the date you take over decides how much cash you have, how stretched the crews are and what you can learn. Buying just before a rush leaves little room to settle in. Buying in a quiet stretch gives you time but less cash.
Think about three things: cash, people and information. Cash first. In a quiet period, revenue is thin while payroll and vehicle costs continue, so you will need working capital to bridge until the next rush. In a busy period, receivables and work in progress are large, and the figures on closing day can look very different from a month earlier. Ask your accountant how to handle that in the closing adjustments.
People next. Technicians are stretched in peak times and may have no patience for a new owner asking questions. In a quieter time they have more room to meet you, but some may be laid off or looking elsewhere. Ask how the seller keeps people through slow weeks.
Information last. A quiet stretch is a good time to inspect equipment and read the files, but it will not show you how the business performs under load. Ask for records from the last full cycle, and visit during a busy week if you can. Choose a closing date that lets the seller help you through the first rush. If the seller offers to stay through the first stretch, write down exactly what they will do, so help is a plan rather than a hope.
Key takeaways
- Plan working capital for the quiet stretch after you take over.
- Ask how the closing adjusts for receivables and unfinished jobs.
- Watch the business during a busy week before you close, if possible.
Related reading
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat is Cash Flow
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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