The HVAC Buyer's Checklist: What to Verify Before You Close#
Most acquisition checklists are generic. HVAC has its own failure points, and they show up after closing if you don't catch them first.
Revenue mix and seasonality#
Look at the split between recurring maintenance contracts and one-off install or repair jobs. A business with 60% of revenue from seasonal AC installs looks great in July and terrible in February. Ask for month-by-month revenue for the last three years, not just annual totals. If the seller can't produce it broken out by month, that's a red flag on their own bookkeeping.
Recurring service agreements are the most valuable revenue on the books. They predict future cash flow and they transfer with the business. Count them, check the actual renewal rate, not just the number sold, and confirm the pricing hasn't been artificially held flat to inflate retention numbers.
Licensing and technician retention#
HVAC work requires a state contractor's license and EPA Section 608 certification for anyone handling refrigerant. Confirm whose license the business currently operates under. If it's the owner's personal license, that license does not transfer in a sale. You'll need your own licensed qualifier in place before closing, or a transition period where the seller stays on to hold the license.
Then look at the technicians. A service business is really a retention business: if two senior techs leave in the first 90 days, you've bought a truck fleet and a customer list, not an operating company. Ask for tenure by employee, not just headcount, and find out if any techs have side businesses or side deals with commercial accounts that could walk with them.
Fleet, equipment, and backlog#
Trucks and tools are capital-intensive and depreciate fast. Get an independent mechanical inspection on the fleet, not just an odometer count, and check maintenance logs. A truck that looks fine but needs $8,000 in deferred repairs changes the math on the deal.
Also pull the open work order backlog. A large backlog can mean strong demand, or it can mean the business is understaffed and customers are already frustrated. Call a sample of customers with open tickets if the seller allows it.
SDE reconstruction#
Owner add-backs get aggressive in trades businesses. Personal vehicle expenses, family members on payroll who don't work, and one-time equipment purchases labeled as repairs are common. Reconstruct SDE line by line against bank statements and tax returns, not just the seller's summary. If the add-backs don't reconcile to actual cash movement, treat the multiple as applying to a smaller number.
Compliance and liability history#
Refrigerant handling carries EPA exposure, and HVAC work carries real injury and property-damage risk. Pull the certificate of insurance history, ask about any pending claims or code violations, and check whether any commercial contracts require bonding you'd need to requalify for under new ownership.
Where Openfair fits#
Openfair's CIMs are built to surface exactly these details upfront: revenue mix by month, technician tenure, license structure, so buyers aren't chasing this information after signing an LOI.
If you're evaluating an HVAC business right now, this is the order to work through it in before you get attached to the number on the listing.