Get the Free Guide
In this episode of Sell or Scale, John Bartlett interviews Josh Ford with Engage Group Partners, specializing in acquiring and growing residential HVAC, plumbing, and electrical service businesses across Michigan, North Carolina, and Washington.
Josh leverages his 12-year background in field service management software to identify profitable acquisition targets. He focuses on businesses with at least 10 employees, established brands (10-40 years old), minimal marketing spend, and revenues between $2-5M.
The conversation explores how many service businesses hit a growth ceiling at $2-3M in revenue with 8-12 employees. This plateau occurs because owners often can’t transition from hands-on management to building structured departments with dedicated managers. Josh’s post-acquisition strategy addresses this by implementing professional software systems, optimizing pricing structures, and expanding marketing efforts.
On valuation, Josh typically offers around 3x SDE (Seller’s Discretionary Earnings), potentially increasing to 3.5x for businesses with a strong online presence and staff who can be promoted to management positions. While private equity firms might offer more, Josh differentiates his approach by preserving company culture and employee relationships.
Most sellers transition out within three to six months post-sale, primarily transferring licenses and key relationships. Josh emphasizes that owners should prepare for sale by ensuring true profitability instead of just revenue and developing capable management.
The interview concludes with Josh offering guidance to owners considering an exit and sharing contact information for those interested in learning more about the acquisition process.
