Your HVAC Business Is Worth More Than You Think—And Less Than You Hope

That gap between those two numbers? That's where I've watched owners either build generational wealth or walk away with regret.

I've Had This Exact Conversation 25 Times

Picture this: An owner sits across from me. Calloused hands. Tired eyes. He's got four trucks in the lot, eight guys on payroll, and just crossed a million in revenue last year. Built the whole thing from a single van and a prayer.

He leans forward and asks the question they all ask: "So what's it actually worth?"

And I give him the answer nobody wants to hear: It depends.

Not on some magic formula I pulled from a textbook. It depends on what a buyer actually gives a damn about. Do you have maintenance contracts locking in predictable revenue? Are your techs EPA-certified and NATE-certified, or are you crossing your fingers every time they go out on a call? Can someone actually read your financials, or is it a shoebox of receipts and "I'll figure it out later"?

Here's what kills me. Most owners don't ask this question until they're already tired. Until they're ready to hang it up. By then? They've been bleeding value for years without even knowing it.

I watched one owner in Charlotte leave $340,000 on the table because he never bothered to formalize his maintenance agreements. Three hundred and forty thousand dollars. Gone. Just like that.

Part 1: Let's Talk About What Your Business Is Actually Worth

Here's a hard truth that might sting a little: Your business isn't worth what you feel it's worth.

I know. You built this thing. You missed your kid's soccer games. You took calls at 2 AM when someone's furnace died in January. That sweat equity feels like it should count for something.

And it does—just not the way you think.

Buyers care about one thing: cash flow and whether they can count on it showing up next month. That's it. That's the whole game.

Most owners I meet make the same mistake. They get their CPA to run an EBITDA number, slap it on a napkin, and figure they're done.

That's like diagnosing a car problem by only checking the oil. Sure, it tells you something. But you're missing the transmission, the brakes, the electrical system—everything else that actually matters.

You Need to See Five Numbers Side by Side

Here's what Your Exit Value does that most CPAs won't: it runs all five methods automatically, using your actual industry code and real transaction data from businesses like yours. Not some outdated rule of thumb from a book published when flip phones were still cool.

The Numbers You Need to Know (2024-2025)

Let me give you the benchmarks I'm seeing right now in HVAC:

• SDE multiple: 1.5x to 3.5x (most small shops land around 2x to 2.5x)

• EBITDA multiple: 3x to 6x (bigger players with management in place push higher)

• Revenue multiple: 0.30x to 0.80x (wide range, depends heavily on margins)

• Gross profit multiple: 1x to 2x

• Service vehicles: $20,000 to $45,000 each (assuming decent condition)

• Maintenance contracts: Add a 5% to 15% premium for every year of locked-in recurring revenue

That last one? That's the secret weapon most owners ignore.

Here's What Almost Everyone Misses

It's not just about what your business is worth today. It's whether that number is climbing or sliding—and whether you understand why.

The owners who walk away with the biggest checks? They're not necessarily running the biggest companies. They're the ones who track their valuation like a hawk. Quarterly. Sometimes monthly. They make decisions specifically designed to push that number up.

One owner I worked with in Denver spent $40,000 on NATE certifications for his entire crew. Seemed like a lot at the time. Eighteen months later, when he sold? That investment added $180,000 to his sale price. Buyers saw a professional operation with trained technicians who wouldn't need babysitting.

Those "Owner Perks" Are Going to Bite You

What's your actual market-rate salary? And I mean what you'd pay a GM to run this thing—not what you've been writing yourself to minimize taxes.

That company truck you drive to Home Depot on weekends? Your cell phone bill? Your wife handling the books for $60K a year? That hunting trip you wrote off as a "team building retreat"?

Every single one of these affects your EBITDA and SDE calculations. And buyers will find them. During due diligence, they'll pick through your books like forensic accountants on a true crime show.

Your Exit Value walks you through each adjustment before you ever sit down with a buyer. No surprises. No awkward explanations. No last-minute valuation haircuts.

Here's something I tell every owner: When you finally sit across from a serious buyer, you need more than a number scribbled on the back of a business card. You need a professional Broker Opinion of Value with real methodology and industry comparables. That document signals you're not some desperate seller—they can't lowball you. It gives both sides a legitimate starting point.

Part 2: Your Exit Strategy Is Probably Backwards

Let me guess what you think "exit strategy" means: Find a buyer when you're ready to sell.

I get it. That's what most people think.

It's also completely wrong.

You should be thinking about your exit three to five years before you actually want out. Minimum.

Why? Because the things that make a business sellable—truly sellable at a premium price—take time to build. You can't manufacture them overnight.

Want an Uncomfortable Truth?

More than 70% of businesses never sell.

Read that again. Seven out of ten owners who want to sell... can't.

Not because there aren't buyers. There are plenty of buyers out there hungry for good HVAC companies. Private equity firms are gobbling them up. Strategic acquirers want to expand their footprint.

These businesses don't sell because the owners didn't prepare them to be sold. They're too dependent on the owner. The books are a mess. The customer base is too concentrated. Pick your poison.

I watched a guy in Atlanta spend 28 years building a solid HVAC company. Good reputation. Loyal customers. He finally decided to retire, put it on the market, and... nothing. Six months, barely a nibble. Why? Because he was the business. Every major customer relationship ran through him. Every significant decision required his input. Buyers took one look and thought, "What exactly am I buying here? When he leaves, so does everything else."

He eventually sold—for about 40% of what a prepared business would have fetched.

The 8 Things Buyers Actually Look At

1. Owner dependence – Can this thing run without you?

2. Financial performance – Are the numbers real, consistent, and growing?

3. Growth capability – Is there room to expand, or is this tapped out?

4. Customer concentration – Does one client represent 30% of revenue? That's terrifying to buyers.

5. Strength of systems – Are there processes, or is everything in your head?

6. Depth of management – Who's the second-in-command? Is there one?

7. Legal and compliance – Any skeletons in the closet?

8. Strategic position – Where does this business fit in the market?

Your Exit Value scores you across all eight factors through something called an Exit Readiness Scorecard. You'll see exactly where you're strong, where you're exposed—and here's the kicker—the dollar value each weakness is costing you.

Imagine knowing that your owner dependence problem is worth $175,000 in lost value. That number makes the solution a lot easier to justify.

Not Every Dollar You Invest Comes Back Equal

This is where things get interesting.

See the pattern? Some investments return 3x, 4x, even 5x. Others barely move the needle.

You can't make smart bets without understanding the payoff. Your Exit Value shows you the ROI for every improvement you could make—ranked by impact.

What Actually Drives Value in HVAC?

Let me get specific:

• Certifications matter. EPA Section 608 is table stakes. NATE certification signals professionalism. Manufacturer certifications (Carrier, Trane, Lennox) open doors.

• Recurring revenue is gold. Maintenance agreements, service contracts—anything that guarantees money showing up next month without you having to hunt for it.

• Customer mix reduces risk. Heavy on residential with some commercial? Good. Ninety percent dependent on three property management companies? That's a time bomb.

• Seasonality is a real concern. Can you show revenue in the shoulder seasons, or does everything die between October and March?

• Reputation has a price tag. Strong Google reviews, low callback rates, high customer retention—buyers will pay a premium for goodwill.

• Equipment and fleet condition. Nobody wants to inherit a fleet of trucks with 200,000 miles and compressors held together with zip ties.

The platform generates a prioritized punch list for you. Every item has an estimated value increase attached. You'll know exactly where to focus your energy.

See the Whole Picture

Your Exit Value creates what we call a Value Acceleration Roadmap. Think of it as GPS for your exit:

• Here's where you are today

• Here's where you want to be when you sell

• Here's exactly what to do each quarter to get there

When an owner can actually see the path from $600,000 today to $950,000 at exit, laid out in concrete steps, something shifts. It stops feeling abstract. It becomes a project with milestones.

That visibility? That's what keeps people on track.

Part 3: The Gap Nobody Wants to Talk About

Okay, here's where most "how to value your business" articles completely fall apart.

They assume you only care about selling.

But let's be honest. You don't just care about selling. You care about what happens after you sell. You care about whether you can actually afford to stop working.

I've sat with owners who sold their businesses, threw a party, bought a boat—and eighteen months later realized they were going to run out of money. It's brutal to watch. And it's more common than you'd think.

The Asset Gap

It's simple math, but almost nobody does it:

What you'll have after you sell minus what you'll need to fund 25 years of retirement equals your gap.

If that number is positive, congratulations. You're set.

If it's negative? You've got work to do.

The Math That Crushes People

Here's where reality gets harsh.

Let's say your business is worth a million dollars. You think you're walking away with a million dollars.

You're not.

Half. You might walk away with roughly half.

Now ask yourself: Will $550,000—combined with whatever else you've saved—generate enough income for you and your spouse to live for 25 or 30 years?

For a lot of people, the answer is no. Not without a plan.

Your Exit Value's Asset Gap Calculator

This is where things get practical. You plug in:

• Your estimated net proceeds from the sale

• Retirement accounts, home equity, other investments

• Personal debts and liabilities

• What you actually need to live on each year

The system tells you straight: enough or shortfall. And if there's a shortfall, it tells you exactly how big it is.

No sugarcoating. No false hope. Just the number.

Run the Scenarios Before They Run You

What if you could sell in three years instead of five?

What if you pushed the sale price 15% higher by investing in the right improvements?

What if the market softens and you get 15% less than expected?

What if you trimmed your retirement budget by $10,000 a year?

You need to model these scenarios now—while you still have time to adjust. Maybe waiting two extra years closes the gap completely. Maybe modest lifestyle tweaks get you there. Maybe you need to aggressively build value starting today.

You can't make that call without running the numbers.

HVAC-Specific Risks You Can't Ignore

Every valuation needs a reality check. Here's what keeps HVAC buyers up at night:

• Seasonality. If 70% of your revenue comes in three summer months, that's a risk. Buyers discount for it.

• Customer concentration. One property management company representing 40% of revenue? That's a single point of failure.

• Technician shortage. If you can't find and keep certified techs, growth stalls. Buyers see that.

• Regulatory changes. Refrigerant phase-outs, new efficiency standards—the industry shifts fast.

• Economic sensitivity. When construction slows or housing dips, HVAC often follows.

These factors can knock 5% to 15% off your valuation. Operations with diversified customer bases and year-round revenue streams typically dodge the steeper discounts.

Monte Carlo: Know Your Odds

Instead of assuming you'll earn a flat 6% on your investments forever (you won't), run what's called a Monte Carlo simulation. It models a thousand different market scenarios—some great, some terrible, most somewhere in between.

The output looks like this:

"Based on 1,000 simulations, you have an 85% chance of not running out of money before age 90."

If that number comes back at 65%? You know you need to either boost your sale proceeds, spend less in retirement, or delay your exit.

At least you'll know. And knowing beats hoping.

The Bottom Line

Your HVAC business is worth more than you think. It's also worth less than you hope.

The gap between those two numbers comes down to preparation.

Here's what separates the owners who win from the ones who settle:

✓ They understand their value today—not one number, but five methods triangulated with real transaction data

✓ They know their exit readiness—every weakness identified, every weakness priced

✓ They calculate their asset gap—and they model scenarios until they find a path that works

The owners who walk away wealthy aren't always the ones with the biggest operations. They're the ones who treated their exit like a project. Beginning, middle, end. Data, accountability, execution.

Whether You're Five Years Out, Just Starting to Think About It, or Ready to Sell This Year

The time to start is now. Not next quarter. Not after busy season. Now.

Your Exit Value gives you the complete picture: valuation, exit readiness, gap analysis, and a step-by-step roadmap to the retirement you actually deserve.

[Get Started with Your Exit Value →]

Quick Reference: 2024 HVAC Valuation Rules of Thumb