We operate a regional HVAC service company serving residential and commercial clients across the greater Anchorage area. What sets us apart is a 22-year reputation for same-day service and a loyal commercial client base that generates 60 percent of our revenue on recurring maintenance contracts.

I am targeting a sale in the next 18 to 24 months. My partner is ready to retire and we have discussed this for several years. I want to spend two years properly preparing rather than rushing into a process we are not ready for.

Most likely an individual owner-operator or a regional service company looking to expand into Alaska. We are probably too small for private equity but the right individual buyer with industry experience could step in and run this well.

My total compensation including salary, health insurance, vehicle, and profit distributions is approximately $280,000 per year. I also run about $30,000 in personal expenses through the business that would not continue under new ownership.

Vehicle lease for my personal truck ($14,400), my wife's part-time bookkeeping salary which is above market ($24,000), and annual sponsorship of a local youth hockey league ($6,000) that I do for personal reasons. Total of approximately $44,400 in add-backs.

Revenue has grown from $2.1M three years ago to $2.7M last year. The growth has been driven by expanding our commercial maintenance contracts. One year had a dip due to a key technician leaving, but we recovered and added two new team members.

Our CPA prepares annual statements but they are cash basis. I have been told we would need to convert to accrual and prepare a recast P&L before going to market. This is something I plan to work on in the next 6 months with our accountant.

Honestly, the business would struggle. Our operations manager handles scheduling and dispatch well, but all major customer relationships and vendor negotiations go through me. This is our biggest vulnerability and something I have started actively working to change by documenting key processes and introducing our manager to our top clients.

Three things: the owner dependency issue described above, our commercial lease which expires in 14 months and needs to be extended, and one outstanding warranty dispute with a commercial client that we expect to resolve by end of year.

Our commercial maintenance contracts are our most important assets. Most are annual and renew automatically. I have not reviewed them for assignability and this is something I need to ask our attorney about. Our facility lease is the most urgent issue, it needs to be extended and the assignment clause reviewed before we go to market.

One warranty dispute with a commercial client over an installation from 18 months ago. We expect to resolve it for under $15,000 but it has not been settled yet. No other outstanding legal matters.

A clean sale at a price that lets me retire comfortably, with some confidence that the business will continue to employ our 14 team members under good ownership. The number I have in my head is $3.5 million net after taxes and transaction costs. I have spoken briefly with a financial advisor about investing the proceeds.

Lease extended for at least 5 years, owner dependency reduced so our operations manager can handle day-to-day without me, financials converted to accrual, and the warranty dispute resolved. If those four things are done I feel we are ready.

1. Resolve the lease situation by extending for at least 5 years and confirming assignment rights. 2. Spend the next 12 months reducing owner dependency by documenting processes and transitioning key client relationships to our operations manager. 3. Work with our CPA to convert our books to accrual and prepare a clean recast P&L.

I would say a 5. The business has good fundamentals, growing revenue, and a solid team. But the owner dependency, the lease situation, and the financial cleanup work needed mean I am not ready to go to market yet. In 18 to 24 months with focused preparation I think we could be at a 8 or 9.