Is This $4.5M HVAC Business with 33% Margins A Smart Buy?

In this episode, we reviewed a $4.5M plumbing and HVAC business with a strong focus on repair and replacement services in the Northeast US. With 1.4M EBITDA and 2,500 active accounts, it has a balanced revenue stream, recurring income, and no exposure to new construction. The big question is whether the impressive 33% margins are sustainable as the business scales. Thanks to this week's sponsor: Acquisition Lab and their team have been longtime supporters of the pod. Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close. If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [email protected] and mention us ;) Business At A Glance Revenue: $4.5M (2023) EBITDA: $1.4M Customer Base: 2,500 active accounts Location: Northeast US Revenue Mix: 60% plumbing, 40% HVAC Team: 23 employees Focus: Repair & replacement only What We Thought Customer Base Questions John raised concerns about the definition of "active" accounts. If the 2,500 accounts are truly recent, it's impressive. Otherwise, it could indicate a weaker client base than advertised. Multi-Trade Challenges At $4M, managing both plumbing and HVAC might hurt focus. John thinks focusing on one service would improve margins. Northeast Market Strength The business benefits from higher ticket prices in the region due to hydronic heating systems, but unionization could pose a challenge depending on location. Subscribe to weekly our Newsletter and get curated deals in your inbox Advertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [email protected]