Overcoming State a certification hurdles

December 23, 2020

by a searcher from Northwestern University - Kellogg School of Management in Fort Lauderdale, FL, USA

Anyone bought an HVAC company (or similar mechanical contractor) where the state required someone licensed to qualify the business? Appears to be a risk in purchasing the business even if existing owner will qualify for a year. No license = no revenue = risk

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Reply by a searcher
from Harvard University in New York, NY, USA

Not in HVAC, but I'm involved in lawn maintenance and need state licensing for pesticide application. There are 2 things to consider -- the business side and the legal side. The first question is, can your business do the work, and is it just a matter of legal licensing? This is akin to asking, do you have highly skilled drivers but they are just not licensed. If it is just a legal issue, I would use whatever time the seller has left, and just get the license yourself. Most of the time it's not hard if you are a smart individual. I was told it would take me several years to study for and pass my licensing exams. I needed about 5 licenses which I banged out in about 6 months. (would have gotten them much sooner if not for COVID shutting down testing sites). Worst case, you can offer to pay the seller to extend his license for another year while you acquire your own or hire someone else who has it.

Reply by an intermediary
from Wake Forest University in Winston-Salem, NC, USA

This is not an uncommon issue in any of the licensed trades. Outside of smaller owner/operator companies, it is also not uncommon for an employee to be the qualifier (check your state requirements as some differ). When using an employee, you can mitigate the risk by making sure the employee is well compensated, that you are always recruiting (or at least keeping a list of candidates), and as ^redacted‌ and ^redacted‌ mention, consider getting the license yourself. Sometimes it is easier than it appears (I just had a buyer get his General Contractor's license in about six weeks).

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