Patrick Lange on Selling Your Service Business - EP.293

Alex Bridgeman and Rob Southern speak with Patrick Lange, a business broker specializing in HVAC, plumbing, and electrical companies. Patrick shares how he transitioned from selling Main Street businesses to focusing exclusively on the trades after buying and running his own heating and air company. He explains why most small trade businesses struggle to sell and what drives value in these service companies. Patrick emphasizes four critical factors: getting out of the van and delegating work, maintaining clean books and records, building recurring revenue through service agreements rather than relying on replacement sales, and avoiding the pitfalls of new construction contracts.

They discuss:

- Why so many trade business owners have no realistic idea what their company is worth

- How buyers evaluate risk when the seller has been the primary technician or salesperson

- The problems with earn-outs tied to net income versus gross revenue

- Why Patrick meets buyers and sellers face-to-face early in the process instead of keeping them separated

- What happens when a seller has been running personal expenses through the business for decades

Patrick's approach centers on honest, data-driven valuations and preparing sellers years before they're ready to exit, so they understand what buyers actually pay for and can build toward a realistic number.

Topics:

(00:00:00) - Intro

(00:01:15) - From financial planner to HVAC broker

(00:05:28) - Why focus matters in business brokerage