Operating HVAC with a 3+ hour drive to work?

April 07, 2021

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Miami Beach, FL, USA

Searchfunder brain trust! Has anyone made their first acquisition in a company that's a lengthy drive from where they live?

In my quest to buy an HVAC or plumbing company in South Florida, I stumbled across one small ($300k-$500k cash flow) air conditioning company that's a 3 hour drive from where I live. Current owners live out of state. This would be my first acquisition in the industry.

Typically, I'd ignore anything far away. However, this business is within driving distance, so it's not like I need to take a 2+ hour flight to visit the business. And it's already run remotely. The way I could see this working is I'd go for at least two days each week and run it remotely the rest of the week. But, while I'm OK with trading off some growth & efficiency by being relatively far away, I want to make sure I'm not risking the whole company imploding!

Would love to hear thoughts and personal experiences!

Reply by a searcher
from The University of North Carolina at Chapel Hill in Newport, RI, USA

Hi Charles, I'm in a similar position of looking to remain in my current residence while acquiring a business further away. My perspective echos a lot of previous comments about planning to be on-site 5 days a week at first. Another thing to consider beyond just the immediate post-close is how seasonal the business is or what long-term growth initiatives might demand. I'm currently pursuing an acquisition with crazy seasonality that will demand attention something like 7 days a week for 2 months. Fortunately with my military background, I can compartmentalize this as a mini-deployment. As long as spouse/significant other is okay with that, I say go forth. But just consider long-term contingencies. Certainly hiring a stellar daily ops manager will help, but it's ultimately still your baby.
Another thing to consider in the negotiation is how transparent you want to be with the Seller on this point. Sometimes a Seller will view your long distance commute as a risk to the business that they built. It might be a stumbling block getting to close, especially if they will be rolling any equity.

Reply by a searcher
from University of Illinois at Chicago in Madison, WI, USA

The first company I bought was 2.5 hours away from where I currently lived. The company had middle management in place that was planning to stay on and sign employee entrance agreements. When I was first introduced to the company, I had a really cute idea: I would commute a few times a week then manage things remotely on other days(very similar to you). The company was in an industry I had no experience in. By the time we closed, I had signed a lease for an apartment near the company.

The seller has experience with this company that you don’t have. He has earned the loyalty of his team. He can work remotely and it may not be a big deal. As a buyer, you don’t have that luxury. For your first one, you need to be in there... everyday, grinding it out. Every company is different (especially small ones as they tend to be a direct reflection of the previous owner) and it’s hard to get a grasp on them when you’re not physically there.

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