How to Get Your Service Business Ready to Sell, Even if It's Years Away
Many owners I talk to aren't planning to sell anytime soon. They're busy running jobs, and retirement feels like a someday question. That's fine. The nice thing about getting ready early is that almost everything that makes a business easier to sell also makes it easier to run, and easier to step away from for a week.
I'm Madison Clarke, and I live near Johns Creek, Georgia. Trellis Equities is a small, family-backed search fund. We're looking for one HVAC, plumbing, electrical or similar trades business to buy and keep for the long run. These are the things we'd look for as buyers, and the things we'd want in place in any company we owned.
1. Build recurring maintenance work
Maintenance agreements (seasonal HVAC tune-ups, backflow testing, water treatment service, fire sprinkler inspections and so on) give a business work it can count on. They also give a new owner a reason to believe the customers will keep calling after you leave.
Practical steps:
- Write your agreements down, even if some are handshake deals today
- Keep a simple list of agreement customers with renewal dates and what's included
- Track how many renew each year so you know your own numbers
- Make sure the schedule lives in a system, not just in your head
2. Get a manager in place
The most common worry I hear from owners is "the business is me." If you're the only person who can price a job, calm an upset customer or decide which tech goes where, the business is hard to sell and hard to leave for a vacation.
You don't have to hand everything over at once. Start with one area, maybe dispatch or estimating, and let a trusted lead tech or office manager own it. Write down how you do things. Over a year or two, you may find someone who can run the day-to-day.
In Georgia's licensed trades there's another reason this matters. HVAC, plumbing and electrical companies set up as partnerships, LLCs or corporations need a licensed person regularly connected with the business and working there full-time, and the company has to notify the licensing division within seven days if that person leaves. If you're the only license holder, it's worth talking with your attorney about what a future transition would look like. A licensed manager on your team can make that part much simpler.
3. Keep clean, separate books
You don't need fancy accounting, but you do need books someone else can follow:
- Keep business and personal expenses separate
- Reconcile your bank accounts regularly
- Keep payroll, receivables and payables up to date
- Hold onto tax returns and financial statements for several years
The SBA suggests making sure someone handles receivables, payables, cash, bank reconciliation and payroll, whether that's you, a bookkeeper or a CPA. When the time comes to sell, a CPA can help you present your numbers clearly.
4. Write down what's in your head
Make a short binder or shared folder with:
- Your key customers, builders and property managers, and who knows them
- Vendor and supply house accounts
- Vehicles, equipment and any leases
- Licenses, certifications and renewal dates for you and your team
- How a job flows from the first call to getting paid
5. Keep licenses, permits and insurance current
Expired paperwork tends to come up at the worst possible moment. Keep a list of what renews when, for you and your team.
6. Talk to your CPA and attorney now, not later
How you eventually sell can affect your taxes and your legal obligations. A CPA and attorney who know your goals years in advance have far more options to work with than ones you call the month before closing.
You don't have to do it all at once
Pick one item from this list each quarter. In a couple of years you'll have a business that runs more smoothly, gives you more freedom, and is ready whenever you are.
If you'd like to talk with a local buyer, even just to hear what someone like me would look for, I'd be glad to. Here's a bit more about me.