How To Sell Your Business With Patrick Lange

SBM 627 Patrick Lange | Selling Businesses

The decision to sell your business is very complex but is possible. It will involve a lot of planning to do. You just need to know who to talk to that you can trust. Tune into this episode as Patrick Lange discusses an effective marketing approach on how to sell businesses and the things you need to consider before doing so. He has been selling these different companies. Many are bankers, private equity groups, insurance agents from various trades. And so they don’t know where to start. Patrick provides them with the right direction. Do you need the same guidance? Stay around and listen!

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How To Sell Your Business With Patrick Lange

I have a friend of mine, Patrick Lange. He is with the Business Modification Group and we’re going to talk about service-based company acquisitions. Are you ready to purchase a company? Are you prepared to buy that company? Why are you looking to purchase a company? Now is a time that we hear and see a lot of people purchasing companies or either being purchased?

Patrick and I were going to talk a little bit about the deal we worked up in 2020. It was a potential solution to a problem that I had that honestly would have caused me more issues had we completely gone through the entire process. I’m super thankful for Patrick and all the knowledge that he gives. If you’re in the HVAC industry, you’ve got to be familiar with Patrick. He’s in all the Facebook Groups and he’s full of knowledge.

We have the episode that’s releasing with Elliott that I interviewed about who’s on your side when it comes to the business acquisitions. Patrick and I were talking about that after the fact. A lot of the things that Patrick and I talk about throughout the years are stuff that Elliot was bringing up and I was like, “This is full circle and stuff here.” I’m super excited and thankful for you to come on the show, Patrick.

Thank you for having me. I meant to go back and I think your show was the very first show that was around. Whenever I was on years ago or whatever it was, your show was my very first experience at podcasting. I don’t know if that’s a blessing or a curse. It’s been a while and we’ve had a lot of conversations along the way. I appreciate being here and everything you do for the industry.

You’re always giving back and educating people and the size of your followers and people who read is a testament to that. I don’t think you probably hear thank you enough because of the information you share. Even me no longer being in the industry but the SEO information, marketing information, getting your mind right information, the due diligence information and all this stuff that you have on here is such a wealth of knowledge. I appreciate you having me in and letting me participate.

If you didn’t read Patrick’s last episode or you don’t know who Patrick is, can you go through and share a little bit about you? You’re not just a business broker, you’re someone who’s been in the trenches. You’ve gone through the processes that we’re going through as business owners. Can you share that story that you have?

I come from a financial background and I’ve owned multiple companies. I’ve been a business broker for a couple of years. Not so long ago, as a business broker, I moved to North Florida, listed the heating and air company for sale and bought it. Prior to that, I do service companies, like a swimming pool service and that type of stuff. I love being in the industry, barriers to entry, you can’t go to Home Depot with plumbing and electrical, your pipe breaks in plumbing even if you’re not very good, you can go fix it but if your conditioning breaks, you’re calling somebody. To me, it’s one of the few things that people will deal with when they get in a bad time.

At my house, if we’ve had money and not had money, we’ve always had a cold there in the summertime. That’s one of the things that my wife and I won’t do without. I bought a heating and air company a couple of years ago, ran it for two years and learned a tremendous amount in that time. I still can’t fix an air conditioner. My life depended on it so I’m not that guy but I learned a tremendous about the industry when I was doing that. I realized it was no broker’s shoe. I was still doing business brokerage at the time. I was selling everything, bars, restaurants, gas stations, you name it.

I realized nobody was adding value to the heating and air space and nobody focused on it. When I looked at listings across the country, they were all over the place, 10 times, 5 times and different multiples. I’m on the state board for the business brokers of Florida and we’re one of the only organizations in the country. We have an MLS system so we can look at what companies sold for. We can see how long they were on the market and what multiples that we use. Was it off of their tax returns or P&L? I’m able to see a tremendous amount of information.

When I went back and looked at that, all heating and air companies were sold and priced within this crazy range. At that time, I decided that owning a business and having employees wasn’t my thing for the future. My oldest son worked with me. I told him I was going to sell the business and he needed to be looking for something different to do. He said he wanted it so we worked out an agreement a little bit. He made his last payment not so long so we’re still friendly.

My office is in his building in his heating and air company so I’m watching the trenches every day. As I walk in, you’ll hear a delivery come up shortly or something. I’m still around the industry a lot at that time. A couple of years ago, I decided that I stop listing and selling anything else and just want the heating and air. It started in Florida, Georgia then Southeast and now, I’m nationwide. I’ve been blessed to be able to work with so many great people.

In the last couple of years, I’ve sold more heating and air companies across the country than anyone. I’ve sold in California, New York, New Jersey, Ohio and all over the place. As a result of being able to build up relationships with you where I’m able to bring buyers to the table quickly because so many people reach out to me and I’m able to participate in things like this and learn so much. That’s my business in a nutshell.

When you're always giving back and educating people, the size of your following and people who listen is a Testament to that. Click To Tweet

You and I first talked about doing things in Florida and Georgia. Now, I spend more time on an airplane. I’ve sold more companies outside of Florida in twelve months. I typically average 15 to 20 companies here. Of all sizes, I’ve sold one-man shops and two companies doing $10 million in sales. It’s a little bit of everything. I love and believe in the industry and like to give back and help out in a way that I can.

The cool thing that I love about it is I have a friend of mine who is on a couple of boards with me locally. His name is Brian and he’s a business broker. He’s like, “We can talk about this stuff.” He knows HVAC. I want to ask him some questions too and I’m like, “I’ll do that.”

Brian Judson is a great broker there in Savannah. He does a great job. He and I have talked about heating and air companies and other businesses. I’ve referred business to him and him to me. He’s a great guy and does a great job. I have a lot of brokers that I work with across the country that say, “This is not what I do every day.” That was part of my problem as a broker. If I sold a restaurant today, a gas station tomorrow and the next day, I listed a flower shop and the person buying the flower shop asked me for some input, I couldn’t add any value.

There was nothing I could say where when you sold, looked at and been around heating and air that I have. When somebody asks me a question, if I don’t know the answer, I’ve informed the person who does. That’s a neat part about the industry. There are a lot of people that give back. I can say, “Pick up a phone and call this person about this.” I can make an introduction or somebody who I know is going to be on the podcast in the future like Brandon Bowlin who I worked with a lot at the bank. I can pick him up.

I had a broker in Atlanta saying that they wanted a buyer to buy a heating and air company. I said, “Call Brandon. If I’m going to try to finance a heating and air company, he’s the guy I’m going to go to first. Here’s a cell phone number, call him and he’ll answer all of your questions.” The guy sent me an email five minutes later. What a wealth of knowledge that guy was. That’s the beauty of me focusing on this niche. I can introduce people like Roland in Housecall Pro and now Chris Hunter at ServiceTitans.

You’re in a position where you can say, “I don’t have all the answers but I know people who do.” I would say at least half of my buyers have no heating and air experience. I’ve been selling these companies and many of them are bankers, private equity groups, insurance agents and from all different trades. If they don’t know who to start or where to go to, I can call Scorpion if you want to do some marketing or depending on what they’re looking for and what they’re doing like Service Heroes. I can make an introduction and point them in the right direction from what I feel are reputable companies and people who give back. If nothing else, they’ll answer your questions, give back to them and give them an opportunity. By me niching, it gives me an upper hand for lack of a better term.

I’ll share that one of the things on the episode where Elliot Holland was talking about going in, deep diving in the numbers and understanding. One of the things that he said that stuck with me was the amount of money that they’re going to make off of it would tempt the honest man to not tell the complete truth. One of the great things that I love about you is the fact that you’re so niched in HVAC that you can see the BS before you can write it on the wall. It’s not like you’re doing a restaurant, a flower shop and now HVAC so you know the KPIs and stuff.

That’s the biggest thing. I’ll have people call me and we’ll talk about listing their company. I have a lot of people across the country call me up and say, “I’m looking at buying this company. You take a look at it.” I’ll say, “Send a copy and I will look at it.” I’ll look at the numbers and there’s no way that number is true. Knowing you doesn’t have to be brilliant in getting an air if you know your numbers briefly. I will call you and say, “Tersh, I got a great company for sale. They’re doing $2 million in sales and their net to the bottom line is $1 million.” It’s an absentee run. When you’re done laughing you’re like, “That’s not possible.”

By looking at so many a day, I’m able to get that BS pretty quick. That’s part of it and that was the other part you and I talked about before. Many buyers are frenzy about buying acquisition and everybody is buying. Smart people are buying companies that they shouldn’t be buying. The numbers don’t make sense. It’s almost like the housing bubble that everybody’s got to be in the rental real estate market. Everybody has to buy a house and like, “I don’t care what it’s worth. This is what I’m paying for it.” You see the same thing taking place in the heating and air space.

You can go through BizBuySell or one of these other sites and pull up heating and air companies for sale not knowing much about the industry. You can go through the listings and say, “No way it’s possible.” A part of that is the broker doesn’t know anybody who’s got a list. They don’t know the numbers so when they talk to somebody they say, “I’m doing $2 million in sales and I’m netting $1 million. That’s where they put me at.” Part of that is an uneducated broker and the other part is fluff.

People say, “We also add this back in and it pays for this. We have a lot of cash and we have this.” Anybody who has seen anything that I’ve talked about, you can’t get paid for cash and a bank is not going to loan you on cash. Having clean books and records is what’s going to get you a premium for your business. We get a buyer because they’re so worried somebody else is going to buy the company down the street. As you and I talked about, “I’ve got an employee problem. I don’t have enough employees. I’m going to buy another company and that’s going to solve my employee problem.”

It’s not and it’s going to make it worse. It’s going to make it bigger and create bigger headaches. That’s where I’m going with. The whole thing is if you don’t have the systems in place and your business is not a well-run machine, buying another company is going to make it worse. It’s going to make your headaches bigger. Let’s take the employee problem. If you have 4 employees, you buy a company that got 10 thinking that solves your problem. Now, when your 4 leave, instead of finding 4, you got to find 14 because everybody has left and you haven’t figured out the employee solution and you think buying is the answer.

SBM 627 Patrick Lange | Selling Businesses
Selling Businesses: If you want to do some marketing depending on what they’re looking for, what they’re doing, for those who don’t know where to start, it’s best to give an introduction and then point them in the right direction.

That’s the problem that I was dealing with in 2020. Whenever we were first talking about this together, it was, “This company has come up for sale and I badly needed employees.” I can purchase this company and they have ten employees or whatever it was that they had. You and Brandon looked at it and you all were like, “It wasn’t making a whole lot of sense here. There’s going to be some negotiations have to go on here.” I was like, “All right.” I dragged my feet a little bit.

It was blatantly obvious that it wasn’t something that we needed to do because they were new construction. If I had to do a new construction job now to save my life, I would be on the street somewhere. There’s no possible way I could do that. It wouldn’t have made any sense to purchase the company in the long run. It was a short-term fix that would have created a long-term problem.

I’m thankful that it didn’t work. Whenever I talked to Brandon, he’s like, “This is not going a good idea for you.” I talked to the guys at CEO Warrior, Mike Disney and he was like, “This doesn’t make sense either.” I was like, “Cool.” I was butt hurt because I wanted it. Now, we have recruiting dialed in where we have a list of people who are ready to come on board with us. Purchasing that company would have created all kinds of problems that we didn’t have at that time.

You could take that onto bookkeeping, pricing and servicing your vehicles. You know way better than I do and there are so many moving parts in the heating and air business that when you fix the problem here, it gets incrementally better. It identifies five other problems that you didn’t know you had. As you fix those things, you put yourself in a better position because you may not even have wanted those employees.

That’s the point because those guys didn’t even fit our culture at all.

You bring in ten guys that will be cancer to your organization because of the way things were run. I’m in the selling heating and air business so I’m not saying no goodbye in their company but I’m saying be smart with it. You had Elliot before talking about the due diligence numbers. Back to where you’re looking at a company that says they’re doing $2 million in sales and they’re making $1 million run far. If they’re dishonest about that, what else are they going to be dishonest about? There are too many quality companies out there. That’s part of what attracted me to the niche. There are a lot of incredible people in the industry.

As you know, there are a few bad ones. They seem to move around a lot. You bump into them a whole time. There are a few bad ones and somebody focuses on the bad ones but the reality is there are a lot of great people, companies and 2, 3 and 4-man shops that have been in business for 30 years that they’re looking for that exit. They’re looking for somebody quality to take them over. Those are oftentimes a much better fit.

A lot of times too, egos get involved. I’ve bought and sold companies and I understand that completely. The egos and the groves, we’re doing $5 million in sales but we’re not putting anything in the bank. It’s having your stuff dialed in so when that acquisition does make sense, you could put those people into your system and you have a system. That’s what I see a lot with smaller companies. They think buying the bigger company is going to bring the systems with it.

If you don’t have a CRM, ways to reach out to these customers that you’re going to bring in, a well-trained CSR staff, director of first impressions or whatever they happen to be called, you don’t have a way to make sure these people are going to stick. What are you buying? You’re buying some phone numbers. I’m not trying to turn people from buying in the heating and air space thing. It’s an incredible opportunity. You can buy oftentimes cheaper than you could market so I believe in the acquisition model.

If you look at what it would cost you to get to $1 million in sales from training, marketing, reputation, staffing, equipment and all those things. The time that it would take for that to happen, you could acquire a company and do that overnight and grow it to something fantastic. That’s the part I love about the industry. I see somebody come into a company like that for doing $1 million in sales have been stuck. I see a lot of people get to $1 million and can never get above that.

You’ll come in and you bought a company and they’re $3 million instantly because they have the right systems to put in place and to grow. They have customer service and they do the maintenance agreements. They have a system for indoor air quality and all these other things so they’re able to take a company like that with great customers, reputation and employees that take to the next level. Oftentimes, the owner is what’s been holding it back but I’ve also seen it where they bought overpay for a company.

To me, money is made in the heating and air space from an acquisition and sales standpoint at the acquisition. If you overpay for a business, you’re going to be chasing your tail the entire time. When you go to sell, you’re not going to get back what you paid for it. It ends up being a disaster. Those companies, you buy them right, have the systems in place and bring those people into their systems. I can show you a success story after success story and the big guys do it and leave clues.

People are buying companies that they shouldn't be buying. The numbers just don't make sense. Click To Tweet

How do you know what processes that you need if you’re buying into a larger business? Are you predominantly seeing larger businesses buy smaller businesses? Have you seen much success with a $1 million a year company buying a $3 million or $5 million a year company in the same area and being successful with that?

One of the reasons I asked that is the more I network and meet people from across the country, the more I talk to people who are at $5 million by mistake. I say that loosely that it’s not by mistake but they’re hard go-getters, have been there for twenty years doing it and have a great reputation in the neighborhood. They have built up that rapport and client base because of being great people in general not because they have amazing policies and procedures in place. They don’t have an amazing CRM or anything like that.

You take a company like ours, that’s a smaller company and we have a lot of those policies and procedures in place. We’ve learned because I’m friends with power proximity, honestly because I’m surrounded by some amazing people who are a lot larger than we are and learn from them. We have service tightened and policies and procedures in place that are two steps ahead of where we’re going to be in 2022. Have you seen acquisitions of larger companies work? Is it the smaller companies getting purchased by larger companies?

I don’t see it very often and I don’t see it work very often. Often, an organization is limited by the beliefs, knowledge and ability of the leader. If you can’t manage 4 people, you can’t manage 40 people. I believe that this is a people business. You’re dealing with your employees, customers, suppliers and your marketing. If you haven’t mastered the people side, having more people magnify your problem doesn’t make it better. I don’t see a lot of smaller companies buying bigger because the smaller guy doesn’t know the problems the bigger guy has.

I’ve seen people from other industries have run companies of 50 people getting in the heating and air space by a smaller company to get their feet wet, learn the industry, lingo, suppliers and how everything works and then a year later, they take it to the next level because they know the people processes and the procedures to make it happen. They have done the things like you’re doing.

I hate to generalize but most heating and air guys doing under $1.5 million in sales typically don’t have a service type in place. They don’t have Housecall Pro or anything to place. They don’t have employee handbooks, training manuals and the things that they can plug people into, where typically a $5 million company won’t even if it by accident will have a lot of those things. They have a system for how it works. Now, you take a $1 million guy and put him in the $5 million systems and he doesn’t even know the system.

He doesn’t know the sense of the system himself or herself and couldn’t build the system whereas the other person may be had built the system over twenty years so they know it like the back of their hand. I could see that and all of a sudden, they have to build policies and procedures that they don’t know what to build fast.

It’s because they have never done it. Oftentimes, the biggest thing I see at the smaller guy or girl level is they don’t go ask for help.

Ignorance is bliss and the ego gets in the way.

They just don’t know. Sometimes, they’re scared to go ask. Part of the reason the organization works is that you’re around other people who are sharing ideas. There’s probably more education that takes place at happy hour when they’re sitting around a table saying, “I did this postcard last week and here’s what we did.” I don’t say that to take away from those organizations.

They’re all great organizations but part of it is the people that you’re with and the conversations that you’re having that I look at myself in every business I’ve ever owned and got better because I found somebody else who was doing better than I was has copied what they did initially. Success leaves clues and I asked people to please help me and that type of stuff. Many guys or girls that own a million-dollar company feel like they’re a lone man or woman. They’ve got everything going around them but they don’t have the time to take a day and go to go to an event. They don’t have time or a day to go to an event.

I’m also guilty of doing what I like to call mule work. Julia and I delegate pretty well. I delegate well because I delegate to Julie but she takes it with a grain of salt. Sometimes, she gives it back to me and most of the time she doesn’t. It’s very much so that when we do the mules work, it’s often. I wouldn’t say mule work is an ego thing but sometimes we can fall into an ego trap.

SBM 627 Patrick Lange | Selling Businesses
Selling Businesses: If you don’t have the systems in place and not a well-run machine, buying another company is going to make it worse. It’s going to make your headaches bigger.

Especially if the technicians who became the business owners and they get out of the van and get into the office but their service techs or experts can’t do it as good as they can or they never could because they’re like, “I’m the best at doing this and it’s my way or the highway.” That becomes a problem. You can’t grow and expand because you’re constantly being pulled in a thousand directions. It’s not because anybody else is incapable of doing it. It’s because you won’t relinquish the reins.

The companies that I see that get to the million and can’t get above, it’s because the owner won’t get out of their own way. They could tell you more about indoor air quality, duct sizing and what TXV motor is. They can tell you anything about an air conditioner for the last 50 years but everybody is lazy and nobody wants to do anything anymore. They’re so good at being tech and it’s like the E-Myth. I don’t know if you’ve ever read Michael Gerber’s book. The same thing I see on those companies is they don’t get out of their way.

A prime example is my son that runs what used to be my company. Because of me and the people that I’m able to be around in the heating and air space and the numbers I see people doing, I’m able to expand his mind. All he knows is fixing air conditioners and getting up and going to work. I’ll be on somebody’s podcast like this or I’ll be at an industry event and I’ll introduce them to somebody and say, “They did $30 million last year.” He’s like, “That guy seems like a normal guy.” I’ll say, “He is and they’d have to be $30 million and this one over here did $300 million last year.”

Part of that is the expanding of the mind that this is normal people that follow the system and are doing it. That’s where being part of those organizations helped. I’ve taken us down a path that has nothing to do with buying and selling heating and air companies but that has to do with that acquisition mindset. If you’re buying a company to get employees because you can’t train employees and you don’t trust other people to do it as good as you do, you’re going to have such a big headache and problem and you’re wasting money.

Understanding what I’ve sold companies that are doing $3 to $5 million in sales when I meet with the owner, they tell me and I can’t fix an air conditioner if I had to. It’s been so long since I’ve been in a van. I probably couldn’t look my gauges upright. They’ve progressed from being the best technician and managers that they can be. As a result of doing that, they’ve escalated their game. You could probably speak to this better than I can but when you were a smaller company, if I’d have said KPIs, you would have looked at me like, “What’s he talking about?”

Now, when you’re analyzing a company for possible acquisition or to help somebody, you can say, “What’s your call volume? How many calls are your guys running? What’s their average ticket?” You know what to ask for because you’ve been educated in that. To answer your question in a ten-minute sermon here, I don’t simply see smaller guys buying bigger ones and being successful because they’re not right and ready. You have to be ready to take your business to the next level and more people and phones ringing more often don’t solve that.

Would you say that as a successful way? I’ve seen some guys doing this in the Facebook groups and maybe that’s one of the ways that you may be ready even if you’re not at the $10, $20 or $30 million range if it’s for a different location to expand your location but it’s still a smaller company.

I see a lot of guys that are doing $1 million or $2 million a year buying other companies. There are a lot of smaller companies out there to be bought. I’m not saying wait until you’re doing $5 million to buy something because I don’t believe that at all. If you’ve got systems in place, you’re doing $1 million a year, you’ve got a CRM, employment and a way to hire, fire and train, you’re ready for it. You can buy another million-dollar company, plug them into your system and continue doing it.

I don’t want to sound that way but one thing I caution people with the acquisition in other towns is understanding expenses. Oftentimes through acquisition, part of what makes the purchase make sense. Let’s say you’re able to buy somebody else in Savannah. Your shops, training rooms, CSRs, supply house here, the way it’s set up and your warehouse manager, all these things are in Savannah. If you buy another company in Savannah, you can save money on rent and duplication. You can save instead of meeting five desks, you can put them under two desks.

All the things that you’re multiplying out by having two separate entities, through that merger and acquisition, you’re able to reduce your expenses down and depending on the numbers, it possibly reduce your costs at the supply house. If you’re spending $1 million on equipment purchases, you can go to $2 million on equipment purchases. Your sales, TM or whatever company you’re dealing with, that’s a conversation you would have with them that. The only downside in my opinion is you don’t get the economies of scale by doing that and you don’t get the overlap from an employee.

That’s the other thing when you acquire another company, now you went from 2 installers to 4 installers. If one installer is sick, you’ve got three other guys or girls you can send out there to take care of it. When they’re in separate towns when that happens, you’re battling the same problems. I even see bigger companies.

I do sell to some private equity groups and other companies that are doing $50 million, $60 million and $300 million in sales and they’ll try to buy in the same town that they have another acquisition in because of that reason. Is it easier for you to bring four new techs into your training room and let him be around four of your existing techs, train them and do everything on Monday morning? Is it easier to drive two hours away and go to that location and have training individually again?

If you overpay for a business, you're going to be chasing your tail the entire time. Click To Tweet

If the owner did run things and you were going to replace that owner with possibly whoever your operator, controller or whoever your operations manager is. Now, you have to have another operations manager in that location or either has good remote policies in place.

It’s like anything else. Having two of something is more challenging than having one. If you bring in a company with 5 people and they’re around your 10, your 10 are going to be able to explain to them what a great guy Tersh is, how great Julie is and how they do things wonderfully. They care about the community and they do this and do that. When it’s a new location, it’s going to be, “Who is this guy Tersh and what are they doing here? I don’t know anything about them.”

You’ve got your people selling your praises to them as opposed to you having to go in there and say, “Trust me. I know what I’m doing. I’m not going to fire you. Everything is going to be great.” In an acquisition, that initial transition period is so important from an employee, customer and everybody’s perspective. Making sure you have that right is easier for that transitionary period to happen on your turf or somewhere where you’re familiar with. My assumption would be if you bought another company in Savannah, they’ve heard of you.

If they’ve heard you’re a good guy and run a good company, they’re excited to come over there. There are benefits to that as well. I’m not here to be the bearer of bad news and say everything is bad but there are some things to keep in mind if you’re looking at a secondary location. If you’re going to have to have everything some of that money you’d make to the acquisition might not be there.

Sean Dasher is a Florida guy like you and he’s down by you mentioned in the Facebook Live stream that some of the franchises that he’s worked for in the past bought a retail store and the employees there. They weren’t the ones that they needed and they quickly left because of the processes that were involved with their business.

A question every buyer asks me is will the employee stay. That’s always the question because the reality is if you’re buying a company, you need the employees. They’re the ones who know what’s going on so you need them to be there and be happy. My answer is some will and some won’t. There is no guarantee. You could buy a company. You could get along with everyone if your employees have that. You buy a new company and there may be somebody there who’s not a good fit for you and that you guys don’t mesh. Maybe they don’t like you or you don’t like them.

I have found that what we try to do in an acquisition is to make it as easy as possible for the employees to stay and make them want to stay. Within three months, you’re going to know if they are a good fit for your organization and they’re going to know if they’re a good fit for your organization. Everybody is in a position to make that decision. The biggest thing we try to prevent is a mass exodus. You might come in on Monday and everybody walks out the door on Tuesday. We do everything we can to prevent that from happening because then you’re in a bad spot. The reality is some people are going to go.

I have sold companies that have multiple technicians and the seller will say, “Julie is the best employee. She runs the show. She is the one that keeps it all together and Steve is a jerk so you’ll probably want to fire Steve.” A year later, I’ll go back and Julie is not there and Steve is running the show. I’ll say, “What happened to Julie?” They will say, “She was stealing. She was horrible.” It’s the complete opposite. It’s a personality thing. Not everyone meshes and makes it through. Transition is the key from an acquisition standpoint.

Whenever you acquire a company like an HVAC company and they have a bookkeeper, a controller and some technicians that are under-performers, it’s not because of poor leadership, they’re just underperformers. Are you still held by the same standards as far as releasing them because they haven’t met their 90-day probation period since you purchased the company? Have they already passed that?

When we buy a company, 99% of what we do is asset sales. We’re not selling the actual corporation. When you buy that company, they are filling out all new paperwork to become your new employee. Every state is going to be a little bit different but most of them have 90 days and that 90 day starts that day so you’ll be able to make that decision.

It’s not weak and they’re a horrible person like what you set as an example and you say, “I can’t fire them because they’ve been here for years.” That’s not the case. That company is going away and your new or existing company is taking them on. They’re signing all new tax forms, all new benefits forms and everything. You’re able to make a decision as they were a new hire.

You’re so familiar with the industry and you came to that one there. I appreciate everything. Are there any last parting words before we go? How do people get in contact with you and learn more about you?

SBM 627 Patrick Lange | Selling Businesses
Selling Businesses: You have to be ready to take your business to the next level and take on more people. And the phone ringing more often doesn’t solve that.

I’m on Facebook, LinkedIn and you can visit my website. It’s @PatrickLange and my company is Business Modification Group. I’ve got a YouTube channel that I’ve tried to put some videos out and trying to educate people. Most of that is online and my website as well. My cell number is on there. Everything I’ve got is out there. Call me. I say it a lot and some people take advantage of it. They will call me and say, “I’m looking at this. Can you help me?” Absolutely. I’d love an opportunity to help so don’t hesitate to reach out to me.

Now is an incredible time to be both buying and selling. The market is pretty hot from a seller’s perspective. They’re talking about some tax changes in Washington so it may make some mathematical sense if you’re going to sell them the next year or two to look at now with the multiples of what they are, the lending and what it is, and how generous it is. If you’re thinking 3 to 4 years down the road and keep plugging along, there will be an impact there, you may want to look at it closer now.

If you’re buying, make sure it’s a good fit and the numbers are real. Don’t get all excited to buy it because it’s a chance at acquisition. Make sure mathematically it makes sense and if it doesn’t, don’t buy it. There are so many opportunities that come available. Now may not be the day for you to make that acquisition even though it seems perfect. You’ll be presented with other opportunities. I can assure you.

I appreciate it and thank you for coming to the show.

It’s my pleasure for having me.

Thank you for sharing constantly. If you are connected with Patrick on Facebook or LinkedIn, you can’t help but stumble across videos that he’s constantly sharing. They’re all helpful so take a look at those videos too. I appreciate that because I’m able to learn tons of things as I’m scrolling through Facebook, instead of it being pictures of food and stuff.

I’m glad somebody watches them. I’m not very good at the whole camera thing. I had a selfie stick before and I would shake so bad. I was nervous and I’ve got a tripod so it makes me feel a little bit better. I say in those videos, if somebody wants to hear about a topic, send me a note. If you’re thinking about it, there are probably 200 other companies that are as well.

Shoot me a note and say, “What about this?” It’s like your question about the employees. It’s the little things like that. The thing that people don’t think to ask, ask them. I’d love an opportunity to do it. I run out of things to talk about so send them over. I’m happy to talk about anything that would interest people.

Thank you to everybody that’s reading this episode. If for some reason you forget Patrick Lange’s name, reach out to me at Tersh@ServiceEmperor.com. Comment on any of the posts anywhere and I’ll get you connected with Patrick and his business there. This show is focused on service business owners, managers and technicians who are considering starting or maybe acquiring their own business. Until we talk again next time. Be safe.

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