Selling a business is a significant milestone. You may be selling for a number of reasons: retirement, health issues, change of pace, better family life, or just cashing in on your hard work. Either way, we know how stressful this transition can be even for shareholders, clients, and staff. So, how can you transition ownership smoothly after selling your HVAC business?
To ensure a smooth handover of your HVAC business, setting clear goals and objectives is vital to help transfer ownership as efficiently as possible. Outline the steps and timelines, and have a clear communication strategy that involves everyone to ensure a successful transition.
The success of a transition from a previous owner to a new owner can have lasting effects on the business’s future operations, customer relationships, and stability. Below, we explain how to navigate the handover effectively in everyone’s best interest.
Planning Your HVAC Business Ownership Transition
Selling your business is more than a quick payday. The blood, sweat, and tears that go into building a successful business mean you are emotionally invested. After all, you want to see your business continue to be successful, right?
Preparing an exit strategy is vital for a smooth transition. But it begins well in advance with careful planning. These processes are also necessary for stakeholders, clients, and staff to experience a smooth transition. Less uncertainty and confusion will ensure staff talent and long-standing clients stick around.
Form a Transition Management Team
As a business owner, you will have a disproportionate number of roles and responsibilities that you have mastered over the years. For a new owner, it would be impossible to fill all the gaps that you would leave behind.
Identify individuals who will take over the responsibilities in advance and prepare them to take over those roles you will be removing yourself from.
Transfer Skills and Knowledge
As you plan your exit strategy, it’s essential to start taking a backseat from the daily responsibilities and duties you once had:
- Overseeing technicians
- Daily planning of new installations and maintenance contracts
- Servicing clients
- Vendor relations
- Ordering components for heating and cooling appliances
- Keeping track of rebates and warranties
A slow exit strategy helps you to invest time to train your successor and pass on your knowledge. This invaluable knowledge helps build their confidence and ability to keep clients’ trust and confidence in their new business.
Start transferring front-facing skills and knowledge to staff who are able to take on the responsibility. Hand over key accounts to staff members so they can build new relationships with existing clients.
Staff generally mirror the values and ethics of the previous owner. Transferring your skills and knowledge to staff while gradually reducing your contact with daily activities will make the transition to the new owner less jarring for clients.
Communicate Early and Often
Communication is vital to a successful handover of ownership. Every transition is challenging and comes with uncertainty and stress for everyone, including stakeholders, staff, suppliers, and clients.
Staff is often the backbone of any HVAC organization; keeping an open dialogue reassures them of job security and new opportunities under the new management, which helps to maintain their trust and support through this process. Their continued commitment is an invaluable asset during the transition.
Be proactive about informing your clients about the change of ownership, and emphasize that it’s business as usual and that the timeline on service contracts doesn’t change.
Explain that the new owner will be committed to their needs for lubricating moving parts, detecting leaks and faulty connections, or maintaining the standard tests and inspections, which they will meet with the same quality and dedication they are used to.
Reassuring stakeholders is vitally important to maintaining their support. They want to know that the new change of ownership will not be a liability to them, but instead, the new owner will value and bring the same set of values and ethics with them.
Document Business Procedures
Thoroughly documenting the company procedures will help a new owner during the transition to get the fundamentals of how the business operates.
Compile a detailed business portfolio that covers:
- The day-to-day business tasks and descriptions
- Standard operating procedures
- Important contacts of key accounts, stakeholders, and suppliers
- List of assets
- Financial summaries
Introduce the New Owner
Introducing the new owner to all key account clients and suppliers helps to build trust with the new leadership.
Co-sign communications, such as emails or letters announcing the new change of ownership. Provide backup support during your handover period and assure stakeholders, clients, employees, and vendors that you will still be acting on a consulting basis for a limited period.
This kind of information gives everyone the assurance that you are not just jumping ship and leaving them to someone they don’t know.
Stay on as a Consultant
During your planning, it’s important to decide how long your transition of ownership will be. Depending on the size of the business, it can be anywhere between three months to two years.
Business broker Patrick Lange says, “75% of the buyers of HVAC businesses are from outside the industry.”
Negotiate a transition period of how long you will stay during the handover to transfer the responsibilities to the new owner. You can also offer to stay on as a consultant for a fixed period.
Note to the New Owner
Employees are one of the biggest challenges in HVAC businesses. Answer their questions and put their minds at rest that you bought a good business and have no plans to come in and start firing or cutting staff.
During the uncertainty of the transition, ask staff what you can do to make their workdays better. Make a list of the issues and implement the solutions quickly, showing that you care about the staff and can make impactful decisions.
Ask questions like:
- How can you improve the conditions of the trucks?
- Are the uniforms comfortable?
- Do they have all the rights tools?
- Is the office furniture comfortable?
- Do they have enough time between service calls?
Conclusion
We understand how transitioning ownership smoothly after selling your HVAC business can be a daunting process for everyone who works and deals with the enterprise. Planning, clear communication, and a collaborative approach are key factors to ensure a successful handover.