By Jenna Schwartz
Editor’s Note: This article discusses selling a service business based in Florida. Though the steps described may be universal, licensing, ownership transfer and other legal requirements vary by state and type of business. Readers should consult an attorney familiar with the applicable state’s requirements before proceeding with a sale.
Every business owner leaves their company eventually. You sell to a bigger company or a competitor across town. Maybe you find a private equity group you believe in and partner with them. You sell to your service manager, or you hand it to your kids. Or one day you lock the shop and auction off the vans.
Which ending you get, and what it pays, is mostly decided years before anyone signs anything. That’s good news, because it means you have time to shape it.
Decide what you want before you decide what it’s worth
It’s natural to start with the number. A better place to start is what you want the day after closing to look like.
Do you want to hand over the keys and go fishing, or stay on and run the company for someone else? Almost every buyer will ask you to stay through a transition. That’s a set period after closing, usually under a consulting or employment agreement, when you introduce the new owner to your customers, your team and your suppliers. A buyer who mostly needs those introductions may ask for a few months. One who wants you running the company, often with a stake in it, may ask for a few years. It’s worth pinning down how long, and in what role, before you agree to terms.
Do you want to sell all of it or most of it? Plenty of owners sell a majority and roll part of the proceeds into a stake in the bigger company. That’s called rollover equity. If the company sells again down the road, that stake can pay out a second time; it can also lose value if the bigger company stumbles. Just know you’ll have a partner now, and partners expect budgets and monthly reports.
And when? The best time to sell is when the company is growing and you still have the energy to carry it through a sale. The hardest time is right after a bad year, or when you’re worn out and ready for it to be over. That tends to show up in the offers.
Then think about who you’d want to sell to, because different buyers fit different goals.
- Strategic buyers are companies like yours that have grown, often HVAC, plumbing or electrical outfits, and buy to add services or move into new regions. Many are run by people who came up in the trades, so they know what it takes to keep trucks and crews busy. Some have private equity money behind them, which is how they can afford to keep buying. Often it’s a competitor you already know.
- Private equity firms also buy companies directly, usually a well-run one they can build a bigger group around. For the right owner that’s a strong route: they tend to keep your name and your people, bring money to grow, and often want you to stay with a stake that can pay out again when they sell. The trade-off is a partner with a budget and a plan to sell again in a few years. By investment bank Capstone Partners’ count, companies owned by private equity made just over 40 percent of the HVAC services acquisitions through mid-2026. Even if you lean another way, hear them out before you decide.
- Independent sponsors and search funds are individuals or small investor groups, often buying their first company. They’ll lean on your managers staying, and the close tends to take longer.
- Inside buyers are your service manager, a group of your employees or a family member. It can be a rewarding way to pass on what you built. You’ll usually finance part of the price yourself, so you get paid over years and stay tied to how the company does after you leave.
Some owners want the highest price. Some care most about where their people land. Both are good reasons, and knowing which one is yours makes every later decision easier.
How a buyer values your company
A buyer is paying for profits the company will earn after you step back, so nearly every question comes back to how sure they can be that those profits keep coming. They give the most credit to revenue that’s recurring and predictable, because they can forecast it. Think maintenance agreements and the service and replacement work that grows out of them. New construction and other project work depends on winning the next job. That revenue can fall off for many reasons: a slower market, a shift in the industry, a change with a big client, or problems in your own bidding. Because it’s harder to count on, it’s often worth less to a buyer.
They’ll also look at where your calls come from and whether your best technicians are likely to stay. In Florida, they’ll ask about your license too.
The license question
In Florida, a contracting company works under a qualifier, the licensed contractor the state calls the qualifying agent. In most owner-run shops, that’s the owner.
That matters at closing. Under section 489.119 of the Florida Statutes, when the qualifier leaves and no other licensed contractor is affiliated with the company, it has 60 days to bring in a new one. Until then, it can’t do contracting work at all. The state can grant a temporary certificate, but it only covers jobs already under contract. Unless the buyer has its own licensed person ready to step in, it won’t close on a company whose license walks out the door with you.
It’s fixable; it just takes time, so start early. Florida allows a company more than one qualifier, so some owners get a manager licensed and added as a second qualifier well before a sale. Others stay on as qualifier after closing until the buyer has its own licensed person in place, which keeps their license tied to a company they no longer own. Either way, put it in front of your attorney before you go to market, not in the middle of diligence.
Get ready one to three years out
Buyers look closely at your last few years of numbers, so the work you put in now shows up in the price later. Three things are worth your time.
Clean up the books. Bring your CPA in early. A buyer will want three years of financial statements that tie to your tax returns, and in larger deals they’ll pay outside accountants to rebuild your earnings line by line, in what’s called a quality of earnings report. That report is where clean books pay off, and where gaps can cost you.
How much can this matter? We were helping a buyer evaluate a pest control company recently. The P&L the sellers sent over showed a razor-thin margin, under 3 percent, and our buyer’s first reaction was, “Hey, let’s pass on this one; they’re a sinking ship and look to be barely break-even.” We asked the sellers to walk us through the numbers. Four partners were paying themselves well above market, and all of their owner’s draws were hitting the wages line too, quarter after quarter. With their pay set at what it would cost to replace them at market rates, the margin was over 20 percent. Same business, same P&L, very different level of buyer interest.
A buyer can only pay for the earnings they can see. Keep a running list of add-backs as you go (personal expenses run through the company, family on payroll, one-time costs) and write down the receipt or the reason for each one. If you can document it, a buyer can count it.
Put a manager in the chair. If every quote, hire and unhappy customer still runs through you, the buyer is really buying you, and you’re the one part of the company that’s leaving. A general manager with a year or two of results behind them takes that risk off the table. One who can also qualify the company settles the license question too.
Get the paperwork together: customer and agreement lists, vehicle titles and loan payoffs, leases, insurance policies, permits and open warranties on past installs. Every one of those gets requested in diligence, and hunting for them with a buyer waiting is how deals start to drag.
How a sale actually runs
At GrowPCG we explain a sale to owners the way you’d explain dating, because the stages line up better than you’d think.
- It starts before the first date, with a blind profile, sometimes called a teaser: a short summary of your company with no name on it. Buyers who like what they see ask for more.
- Once a buyer’s interest is confirmed, they sign a nondisclosure agreement (NDA). Then comes the first date: an exploratory call and a first exchange of information. Like any first date, it goes both ways. They learn about you and the business, and you get a feel for whether they’re the right fit for you.
- Seeing each other regularly means going deeper into your numbers and how the company runs, until the buyer knows enough to say what they’d pay.
- The proposal is the letter of intent (LOI): the price they have in mind and the general terms of the deal. It isn’t binding, but it does start exclusivity: you stop talking to other buyers and commit to working through their diligence to move the deal forward.
- Planning the wedding is due diligence. It feels a lot like an audit: the buyer confirms your legal, financial, tax and regulatory history so they know exactly what they’re buying.
- The marriage certificate is the purchase agreement, and closing day is the wedding, when it all becomes official and binding.
- The honeymoon is the transition period and the work of bringing the two companies together.
A sale like this usually takes six to twelve months from the first call to closing, and diligence takes up a good part of it. Keeping momentum through that stretch is what carries a deal to the finish line. When a deal does stall, it’s usually fatigue rather than some bad discovery: slow answers and missing documents in the middle of a busy season. It’s why we like to say time kills deals. The owners who close are the ones still answering questions promptly start to finish.
What it’s worth, and what you keep
Buyers typically price a company on its adjusted EBITDA, times a multiple.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. In plain terms, it’s what the business earns from its operations before interest on loans, taxes and the wear on your equipment get counted. Adjusted EBITDA cleans that number up: one-time costs and personal expenses come out, and a market salary goes in for whoever takes over your job.
What moves the multiple is everything earlier in this guide: the more predictable your revenue and the less the company leans on you, the higher it goes. The big multiples you read about come from large deals, companies that sell for tens or hundreds of millions of dollars. They don’t tell you much about what a typical contracting company will bring, so before you hold your company up against anyone’s number, ask how big that company was.
Then remember that the price on an LOI is where the conversation about what you keep starts. A deal is built from several pieces.
- Cash at closing, the money in your account on day one.
- An earnout, more money later if the company hits targets after you’ve handed over control.
- A seller note, part of the price paid to you over time, which makes you the bank.
- Rollover equity, the stake you keep in the buyer’s company.
- A working capital target, the receivables and inventory (minus payables) the company has to have on hand at closing. If you come in short, the price adjusts.
- An escrow or holdback, money held back at closing to cover claims if something turns up later.
That’s how a $6 million offer with $5 million in cash at closing can beat a $7 million offer that pays $3 million at closing and ties the rest to an earnout and a note.
The legal form of the deal matters too. Whether it’s an asset sale or a stock sale changes what you keep after taxes, sometimes by a lot. Get your CPA and a deal attorney on it before you sign the LOI.
Common mistakes, and how to avoid them
- Signing exclusivity with the first buyer who calls. The number sounds big, so you agree to stop talking to anyone else before a second buyer has even looked. One buyer sets a price. Several buyers set a market.
- Telling your team too early. Word travels fast in this trade. Your best tech gets a call from a competitor, and the buyer starts wondering who’ll be left. Your people deserve to hear it from you, so bring your managers in when there’s something real to tell them and a plan for their role.
- Letting the company slide during the sale. Diligence often lands in your busy season, and it’s easy to take your eye off the business. Buyers keep watching your monthly numbers until closing, and a real drop in results gives them reason to revisit the price you agreed on. Run the company like you plan to keep it. The deal isn’t real until the money is in your account.
- Relying only on the advisors you already have. The CPA who does your taxes and the attorney who reviews your leases are good people to keep close. A sale also needs specialists: a deal attorney, and an advisor who runs the process so you can keep running the company.
Start before you’re ready
You’ve spent years building something worth selling. Everything that makes a company easier to sell also makes it better to own: books you trust, a manager who can run the day, agreements that renew, a license that doesn’t depend on one person. Start on it now, even if a sale is five years out. If you never sell, you’ll still own a better company.
About the author
Jenna Schwartz is a Managing Partner at GrowPCG Transaction Advisors, an M&A advisory firm in Tampa that works with owners of founder-led home service businesses, including HVAC companies, on sales and acquisitions. She also co-founded Tampa Entrepreneurs. If you’re thinking about a sale, even years from now, she’s glad to talk it through.
For readers outside Florida, Jenna has a national network of attorneys who can assist with state-specific requirements and legal considerations.
Connect with Jenna on LinkedIn or visit growpcg.com. Her exit readiness guide walks through preparation step by step.
This article is general information, not legal, tax, accounting or investment advice.
