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[quote=Anonymous]I'm a second generation HVAC contractor; basically all of our competitors that had any size have cashed out in the last 5 years.  This isn't the first time our industry went down this road.  Groups of "consolidators" went around trying to strategically buy companies to create national brands in the late 90s.  The strategy didn't work and I know a handful of local owners who sold and then bought their companies back for pennies on the dollar.

This time around its all about squeezing as much sales growth as possible.  The playbook is to turn service techs who traditionally fixed things into sales people; and then high pressure selling replacement systems at astronomical prices.  Its a terrible plan for long-term success because once you finish fleecing loyal customers and killing the goodwill that existed in the original business the wheels fall off.  All of the PE shops funding these acquisitions have short term horizons; someone's going to be left holding the bag when there's nothing left to squeeze.

The flip side for us is all positive.  Whenever someone gets bought I start getting calls from  long term techs that aren't interested in selling and want to make a move; the customers soon follow.  I cut a $300K/ year marketing budget to $24K and still turn work away.   Having former used car salesmen run around quoting crazy prices for installs makes life easy for my estimators.  Margins and close rates are all up.

I don't begrudge anyone who has sold out.  Working in people's homes is tough; home service business are historically high expense/ low margin operations.  Depending on what data you use we either rank equal to or just below restaurants in failure rate.  Personally I've never been able to get over what happens to my employees and customers to stomach even entertaining offers.  I can live with accidently running the business into the ground on my own.  I can't walk away and watch someone else knowingly do it.

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