How To Be Taken Seriously as a Buyer

They have clear goals and realistic expectations. It’s a red flag for me (and most sellers) when a buyer is just looking for any company to buy. If you don’t care which industry the business is in, you’re not ready to run a company that specializes in the trades. Learning the business model, understanding the rules, licensing requirements, and other key aspects of the industry takes time and dedication. I’m looking for someone who is specific and clear about the business they want to be in.  

The same goes for buyers who are looking for a unicorn – the perfect business that doesn’t exist. They set up constraints that no company can meet, and they want a bargain price to boot. In my experience, they’re not serious about finding a company to buy; they’re procrastinating by refusing to settle for anything less than perfect.  

They’ve done their homework, and it shows. Serious buyers, especially those without industry experience, do their homework before approaching a seller. They have a specific interest in owning an HVAC company and have learned as much as they can about the industry through research before approaching a broker or intermediary.  

I’ve been on calls where the seller has been frustrated to see that the buyer doesn’t even understand the basic vocabulary of the business. “What’s a maintenance agreement?” “What’s the difference between residential and new construction work?” Questions like these tell me—and the seller—that the buyer didn’t even conduct a superficial Google search. Serious buyers do serious research on trends and follow experts through industry-specific resources. Today, finding the information is not a problem; it’s taking the time to do the work that makes or breaks a buyer’s chances of success.  

They understand what it takes to secure financing. SBA funding is incredibly helpful, but it does come with restrictions and requirements. A buyer who is unaware of what will be required starts out at a disadvantage.  

The same applies to buyers who get prequalified by a lender who doesn’t understand the HVAC industry. It’s one thing to have your banker or a business development specialist confirm you have funds; it’s another to be willing to take on the risk and close a deal. I’ve seen buyers get most of the way through the process of getting financing, only to be turned down because the lender didn’t want to add an HVAC company to their lending portfolio. If a buyer is serious, they’ll ask lenders who have experience lending to industry owners what their requirements are.  

They’re respectful to the seller and about the process. Most owners who are selling their business are at the finish line of their careers. They’ve made business decisions and choices that worked for them at the time. Second-guessing or asking demeaning questions about what they did or didn’t do (such as deciding to expand or make certain changes) makes the owner feel disrespected and less likely to continue the negotiations. A business degree is no substitute for having started, run, and sold a successful business. Implying that you know better than the owner is a sure way to kill a deal.  

Serious buyers are open, amiable, and considerate of the seller’s time and business style. Most HVAC guys care more about what you do than what you say, and serious buyers understand what it takes to connect to everyone on their own terms.  

Not every interested buyer is worthy of serious consideration, and I’ve seen full price offers turned down based on one or more of these red flags.  

To learn more about buying a heating and air company, click here.