Is This $4.5M HVAC Business with 33% Margins A Smart Buy?

In this episode, we reviewed a $4.5M plumbing and HVAC business with a strong focus on repair and replacement services in the Northeast US. With 1.4M EBITDA and 2,500 active accounts, it has a balanced revenue stream, recurring income, and no exposure to new construction. The big question is whether the impressive 33% margins are sustainable as the business scales.

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Business At A Glance
Revenue: $4.5M (2023)
EBITDA: $1.4M
Customer Base: 2,500 active accounts
Location: Northeast US
Revenue Mix: 60% plumbing, 40% HVAC
Team: 23 employees
Focus: Repair & replacement only
What We Thought
Customer Base Questions
John raised concerns about the definition of "active" accounts. If the 2,500 accounts are truly recent, it's impressive. Otherwise, it could indicate a weaker client base than advertised.

Multi-Trade Challenges
At $4M, managing both plumbing and HVAC might hurt focus. John thinks focusing on one service would improve margins.

Northeast Market Strength
The business benefits from higher ticket prices in the region due to hydronic heating systems, but unionization could pose a challenge depending on location.

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