How much does a business broker charge?

Business broker commissions range from 5–12% of the final sale price depending on deal size. Smaller businesses (under $1M) typically pay 10–12%, while mid-market businesses ($1M–$5M) pay 6–10%. Some brokers also charge an upfront retainer of $2,500–$15,000 for CIM preparation, which is usually credited back at closing.

How long does it take to sell a business?

Most small to mid-market business sales take 6–12 months from broker engagement to close. The stages include CIM preparation (4–8 weeks), buyer outreach and qualification (4–12 weeks), due diligence (30–90 days), and closing (2–4 weeks). SBA-financed deals add 30–60 days to the timeline.

What is seller's discretionary earnings (SDE)?

Seller's Discretionary Earnings (SDE) is the standard valuation metric for small businesses. It equals net profit plus owner salary, owner benefits, non-recurring expenses, and depreciation/amortization. SDE represents the total economic benefit to a single owner-operator. Most small businesses sell at 2–4× SDE.

Do I need a business broker to sell my business?

While you can technically sell without a broker, data consistently shows brokered transactions close at 15–25% higher prices and at higher completion rates than unrepresented sales. The exception is if you already have an identified buyer at an agreed price. In any other scenario, professional representation pays for itself many times over.

What is an IBBA-certified business broker?

The International Business Brokers Association (IBBA) is the professional body for business brokers. IBBA-certified brokers hold designations like CBI (Certified Business Intermediary) or M&AMI (Merger & Acquisition Master Intermediary), which require transaction history, continuing education, and adherence to a code of ethics. These certifications signal professional commitment and deal experience.

What is the difference between a business broker and an M&A advisor?

Business brokers typically handle Main Street and lower-middle-market transactions — businesses selling for $100K to $10M. M&A advisors operate in the middle market ($10M to $500M+) with larger teams, investment banking capabilities, and institutional buyer relationships. For businesses under $5M, a CBI-certified business broker is usually the right choice.

How to Sell an HVAC Business

HVAC businesses are among the most actively acquired companies in the US right now. Private equity is consolidating the sector aggressively. Here is what you need to know to get full value when you sell.

What HVAC Businesses Sell For

HVAC companies currently trade at 3–7× EBITDA on Main Street and 5–10× for larger platform-quality businesses being acquired by private equity. The wide range exists because HVAC buyers price on specific signals: recurring revenue percentage, service agreement penetration, technician retention, and geographic density of customers.

A residential HVAC company doing $2M in revenue with 40% gross margins, 60% of revenue from service agreements, and a tenured technician crew might sell at 5× EBITDA. The same revenue without service agreements and high turnover might sell at 3× — a difference of $300,000–$500,000 on the same top line.

Current HVAC Multiple Ranges (2025–2026)

Under $500K revenue

2.5–3.5× EBITDA

Owner-operator, generalist residential

$500K–$2M revenue

3.5–5× EBITDA

Established residential, mixed commercial

$2M–$5M revenue

5–7× EBITDA

Strong service agreement base, growth potential

$5M+ revenue

6–10× EBITDA

Platform targets for PE roll-ups

What Buyers Are Looking For

The HVAC buyer landscape has changed significantly in the past five years. PE-backed platforms now compete aggressively with individual buyers for quality assets. Understanding what each buyer type wants helps you position your business correctly.

Private Equity Roll-Ups

PE firms and their platforms are looking for HVAC businesses that can serve as geographic add-ons — typically $1M+ EBITDA, strong service agreement penetration (40%+), established technician teams, and clean financials going back 3 years. They pay the highest multiples but require the most preparation.

Strategic Acquirers

Larger HVAC companies expanding into new territories or service lines. They value customer list quality, geographic coverage, and brand reputation. Multiples are strong — often 4.5–6× — and integration is smoother because buyers understand the business.

Individual Buyers / Search Funds

Entrepreneurial buyers acquiring their first business. Typically financing through SBA loans, which means the business needs to qualify — positive cash flow, clean books, reasonable real estate terms. These buyers often pay less but close faster.

How to Prepare Your HVAC Business for Sale

Most HVAC owners wait too long to start preparing. The best outcomes come from owners who begin the preparation process 12–24 months before they want to close. Here is what that looks like in practice.

Clean up your financials

Three years of clean P&Ls is the baseline expectation. Remove owner personal expenses from the business, document all add-backs clearly, and get your books on accrual accounting if they aren't already. Tax returns should match your P&Ls.

Build your service agreement base

Service agreements (maintenance contracts) are the single most valued revenue type in HVAC M&A. Buyers pay a premium for predictable, recurring revenue. If you don't have formal agreements, spend 12 months converting your best residential customers before listing.

Document your systems and processes

Buyers are buying a business, not a job. If everything runs through you personally — dispatch, customer relationships, pricing decisions — that's a risk factor that compresses your multiple. Document your dispatch process, pricing structure, and technician workflows.

Stabilize your technician team

High turnover is a red flag. If you've had significant technician turnover in the past 18 months, buyers will discount for it. Address compensation, culture, and any key-man risk before going to market.

Separate real estate from the business

If you own the property your business operates from, it's usually better to sell the business and lease the property back to the new owner. This often nets more total value and gives you an ongoing income stream.

Why a Specialist Broker Matters in HVAC

A generalist broker who primarily sells restaurants and retail stores won't have relationships with the PE platforms and strategic acquirers actively buying HVAC companies. They won't know what service agreement penetration ratio triggers the PE premium. They won't know how to present technician tenure as a value driver.

HVAC-specialist brokers typically have a buyers list that includes the major PE roll-up platforms, regional HVAC strategics, and qualified individual buyers with HVAC operating experience. They run competitive processes that get you multiple bids — and multiple bids are how you get to the top of the multiple range.

What a specialist broker adds:

✓Access to PE platforms actively acquiring HVAC

✓Accurate valuation based on HVAC comps, not generic formulas

✓Competitive bidding process — not just one buyer

✓Representation on service agreement value in the CIM

✓Understanding of HVAC-specific due diligence red flags

✓Experience structuring earn-outs around technician retention

The HVAC Sale Process: What to Expect

Most HVAC business sales take 6–12 months from listing to close. Here is a typical timeline with an experienced broker:

Months 1–2

Preparation & valuation

Broker prepares the Confidential Information Memorandum (CIM), finalizes valuation, builds target buyer list

Months 2–3

Marketing to buyers

Confidential outreach to qualified buyers — PE platforms, strategics, individual buyers. NDAs executed before financials shared.

Months 3–5

Offers & negotiation

Letters of Intent received, best offer selected, terms negotiated including purchase price, structure, and any seller financing or earn-out

Months 5–10

Due diligence

Buyer verifies financials, operations, customer base, and technician team. The most common deal-killers emerge here — address them early.

Months 10–12

Legal documents finalized, purchase price funded, transition plan executed. Owner typically stays on for 30–90 days.

Common Mistakes HVAC Sellers Make

Selling to the first buyer who approaches you

Unsolicited offers are almost always below market. A buyer who reaches out directly knows they're avoiding the competitive process that drives prices up. Always run a proper process.

Undervaluing service agreements

Many owners add back service agreement revenue as if it's worth the same as one-off job revenue. It's not — recurring revenue commands a premium. Make sure your broker understands how to present and price it.

Not addressing key-man risk

If your personal relationships are the business, buyers will discount significantly or require a long earnout tied to customer retention. Start transitioning key relationships 12+ months before sale.

Waiting until you're burned out

Owners who want out immediately accept worse deals. The best sale outcomes happen when the owner is still engaged and the business is growing. Start the process before you're done.