Buying an HVAC or plumbing company

The simple explanation

Someone spent years building a business; now they want to retire or move on. You buy it: the customer list, the phone number that rings, the trained staff, the cash flow that already exists. Day one revenue replaces the years a startup spends searching for it. The craft is in buying carefully: verifying the numbers, structuring the deal, and not overpaying for a business that depends entirely on its departing owner.

A simple hypothetical example

Illustrative — invented to show the shape of the Ownership & Acquisition pattern. No real company is named, and no figure in it is data. The real, sourced companies for this model are on the Examples tab.

A laundromat owner is retiring; the books show steady earnings, the machines are dated but functional, and there's no website or card payment. You buy at a fair multiple of verified earnings, part seller-financed. Modernizing payments and hours (changes the old owner never bothered with) lifts revenue while the loan amortizes. You bought cash flow and added the easy 20%.

A closer look at buying an hvac or plumbing company

The thing you are actually buying is the maintenance-agreement book, and everything else in the deal is depreciating. Vans wear out, parts stock turns, the brand on the door is worth whatever the last review said. But a homeowner on a twice-a-year tune-up plan is a scheduled visit, a first call when the system dies, and the single highest-probability path to a replacement sale. Price the business on how many of those agreements exist, how many renewed last year, and whether they transfer with the sale; a shop with $2M of revenue and no membership base is a shop that has to re-win every customer every year.

Seasonality is the trap in the diligence. ServiceTitan’s own filing notes that demand for its customers’ services rises in the summer months, and any HVAC operator will tell you the same: a business bought on trailing-twelve-month numbers looks entirely different in February, when the phone is quiet and payroll is not. Close in autumn and you can spend your first winter funding a business that will not generate real cash until July. Model the cash trough before you model the return, and size working capital to the worst quarter rather than the average one.

The second trap is that the licence and the labour are the same problem. In most states the company operates under a master licence held by a person, not the entity, and if that person is the retiring seller you have bought a business you may not be allowed to run on closing day. Refrigerant work adds a federal layer on top: EPA’s Section 608 rule requires certified technicians, so the crew is not interchangeable labour. Every deal should have a written answer to two questions: who holds the licence on day 91, and what keeps the three best technicians from following the old owner or a competitor out the door. Stay bonuses and non-solicits are cheaper than replacing a senior tech in a market BLS expects to grow 8%.

On price, know who else is at the table. Funded consolidators are buying this exact business (Wrench Group has stitched 26 markets together this way) and they can pay more for the same cash flow because they spread call-centre, marketing and insurance costs across dozens of locations. You will not out-bid them, but they generally want scale, so the shops below their threshold are where an individual buyer actually wins. Chemed shows what that end of the market clears at: a single Roto-Rooter franchise changed hands for $225,000 in 2025, and three others for between $1.5m and $5.8m the year before. The SBA 7(a) programme, capped at $5 million and explicitly usable for changes of ownership, is the standard instrument there, usually stacked with a seller note. The uncomfortable arithmetic that follows: acquisition debt is a fixed monthly payment, and this business’s revenue is not. The first thing to give way is almost never demand; it is a leveraged buyer meeting a mild winter.

How money moves through this model

Who pays: The business's existing customers keep paying as before

What they pay for: Whatever the business already sells. You're buying the machine that sells it

What creates profit: Existing earnings, minus debt service, plus whatever your improvements add

• Customer
• Offer
• Buying
• Costs
• Profit

What makes this model hard

The honest difficulty: diligence is everything and everything can be misrepresented. Seller-prepared numbers flatter, customer relationships may live in the seller's handshake, and equipment hides deferred maintenance. And after closing, you must actually operate the thing. Buying a job by accident is the classic failure.