The database Entry no. 031
Buying the furnace
Nathan Lenahan had no HVAC experience. He and his partners bought Bart's Heating & Air, a company doing roughly $1.2 million in revenue, for $400,000 using an SBA loan and a $100,000 working capital line, then set out to nearly triple it to $2.72 million.
The trades are the largest category in American small business and the one this database took longest to open, because the owners rarely talk. Acquisition entrepreneurs do. Nathan Lenahan bought Bart's Heating & Air with partners, paying $400,000 for a company turning roughly $1.2 million, financed with an SBA loan plus a $100,000 working capital line, with each partner putting in an additional $70,000 afterward.
The deal size is the first lesson. Conventional acquisition advice says buy as large as you can finance, on the logic that a bigger business supports professional management. Lenahan went small deliberately, and the argument for it is that a $400,000 mistake is survivable while a $4 million one is not.
Why HVAC specifically
His reasoning is the clearest summary of the trade we have found. Compared with electrical or plumbing, HVAC is relatively less complex: the same ten or twelve problems recur, which makes inventory, supply chain, and training manageable. And HVAC carries the highest recurring-revenue share of the trades. Bart's had around 70 annual service contracts at acquisition, each netting $150 to $250 a year.
Seventy service agreements is not much money. It is the shape of the business, which is what he actually bought. The asset underneath the asset
Seventy contracts is roughly $14,000 a year, a rounding error against $1.2 million in revenue. What matters is that a maintenance agreement converts an emergency trade into a scheduled one, and a company with hundreds of them has a predictable calendar rather than a phone that rings at random. Growing that book is the standard lever every buyer in this trade pulls first.
The knowledge you actually need
Lenahan had no direct HVAC experience, and his answer to the obvious objection is that the buyer does not need to know the trade, but the business does: there must be someone inside who genuinely knows HVAC, and keeping that person is the acquisition's real due diligence. It is the same insight Dan Spracklin applied to septic, and the inverse of what went wrong for Dan Burnside, whose key employee left and started a competing business.
Common questions
How much does it cost to buy an HVAC business?
The documented case here: $400,000 for a company turning roughly $1.2 million, financed with an SBA loan and a $100,000 working capital line. Small deals like this are common in the trades and, as Lenahan argues, a $400,000 mistake is survivable in a way a multimillion-dollar one is not.
Why do acquisition buyers prefer HVAC over plumbing or electrical?
Lenahan's reasoning: the same ten to twelve problems recur, which simplifies inventory, supply chain, and training, and HVAC carries the highest recurring-revenue share of the trades thanks to annual service agreements. Those agreements convert an emergency business into a scheduled one.
Do you need trade experience to buy a trades business?
Lenahan had no HVAC background. His position is that the buyer needn't know the trade so long as someone inside the company does, which makes retaining that person the acquisition's real risk. The counterexample is in this database: Dan Burnside's key employee left and started competing.
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