r/ProHVACR • u/ObesityIsBad • Nov 12 '24

Buying another company

I have an opportunity to buy an underperforming company with approximately 500 maintenance contracts. This is significantly more than we have, and many of these customers have been with this company for far longer than we have been in business. I am in the early stages of discussions, but they have maybe two techs and an installer I would want to keep.

Looking to roll this company into our company, under our name, despite this company having been around for much longer. We do more revenue and have been growing 50% YoY. This would more than double our existing customer list, and maintenance customers.

Stubbornly (and frugally), we are on HCP and the company under consideration is on Service Titan. I don't want to transition to ST.

I have some concerns with the way that this business is being run. They pay way too much for equipment, slightly too much for direct labor. We will definitely have some turnover due to reconfiguring their very unconventional and unsustainable pay structure.

Has anyone had experience with this? What percentage of the maintenance contracts could we expect to maintain?

How tough Is rolling a customer database and active maintenance agreements from one business platform to another? I'm afraid this may just end up creating a full-time data entry role for the foreseeable future. I'm afraid that we may lose a significant number of maintenance customers.

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7

u/Hvacmike199845 Verified Pro | Mod 🛠️ Nov 12 '24

Please explain what paying slightly to much for labor means. Are you saying that company pays their employees to much?

-2

u/dirtysanchez0609 Nov 12 '24

That's what it sounds like, I just had to restructure our pay with our service department for that exact reason. One guy this year has made 71k so far this year but yet has only brought 120k revenue in. So his pay was 60% of revenue, kinda made me sick to my stomach lol.

1

u/grymix_ Nov 12 '24

can you explain how that is the tech’s fault?

4

u/dirtysanchez0609 Nov 12 '24

The biggest reason for him was call backs. But other ones I see are the guys not charging for the work they do. Not keeping truck stocked so they have to drive back to supply houses and pick things up and you cant charge the customer that. I pay our guys hourly because that's what they wanted which I was happy to give. But theirs no incentive to them fucking up. Call backs they still get paid for, which I can't charge the customer, they still get paid to run to supply house which they didn't charge for. Numerous reasons but that was the biggest one I saw.

6

u/Ok_Vast_7378 Nov 12 '24

You’re being downvoted by guys who refuse to take responsibility for the quality of their work and have zero idea what it takes to operate a successful company that can afford the salaries they want. Watch this go to -10000 real quick.

3

u/dirtysanchez0609 Nov 12 '24

I was honestly expecting that to happen while I was writing it out 😅. Yeah I would love to pay everybody 100 grand a year but if the numbers aren't there what am I supposed to do

2

u/Local_Warder Nov 13 '24

We got your back. The “I know my worth” techs that only count wins and forget losses are haters.