Buying an appliance or equipment repair business in Florida

Repair businesses fix machines that people and businesses can't do without: home appliances (refrigerators, washers, dryers, ranges), commercial kitchen and laundry equipment, forklifts and material handling equipment, generators, pumps, compressors, small engines, electronics and specialized machinery. Some work from a shop where customers drop equipment off; others send technicians out in vans.

Money comes from service calls (a trip charge plus labor and parts), shop repairs, and maintenance contracts, especially with commercial customers who can't afford downtime. Warranty work for manufacturers or home warranty companies brings volume at set rates, often below what retail customers pay. Parts sales add margin. The strongest businesses build recurring revenue: scheduled maintenance on generators, forklifts or restaurant equipment, billed monthly or per visit. A typical company has technicians trained on certain brands, a parts person, a dispatcher and the owner.

• Commercial maintenance contracts that renew, with service on a schedule. A restaurant or warehouse that can't run without its equipment rarely shops on price.
• Factory authorizations (approval from equipment makers to service their brands), which bring warranty work, parts access, technical support and training.
• Technicians with deep experience on the equipment the company services, and a plan to train new ones. Experienced technicians are the hardest part of this business to replace.
• Fast response times that customers can count on, which is what keeps maintenance contracts renewing.
• Customers spread across many businesses and homes, not one large account.
• An accurate parts inventory with little obsolete stock.
• Little reliance on low-paying home warranty and other third-party warranty work.
• Dispatch, service history and parts usage tracked in software.

Florida has no general state license for repairing appliances, electronics or most commercial equipment, and the state's repair shop registration with FDACS (the Florida Department of Agriculture and Consumer Services) covers only motor vehicle repair. Expect a county or city business tax receipt.

Some of the work has its own rules, so match them to what the company actually does:

• Technicians who open refrigerant circuits (refrigerators, ice machines, commercial refrigeration) need EPA Section 608 certification.
• Installing or repairing propane appliances, equipment and piping requires a liquefied petroleum gas license from FDACS for each business location, with a full-time qualified person employed there (chapter 527).
• Servicing fire extinguishers is licensed separately by the State Fire Marshal, and servicing elevators by the state's Bureau of Elevator Safety.
• Connecting new electrical, plumbing or gas lines inside buildings can be contracting work that needs a licensed contractor. Installing a permanent standby generator usually involves both electrical and gas work, so check whose license the company does it under.

• Revenue by type: service calls, shop repair, maintenance contracts, warranty work and parts.
• Maintenance contracts: customers, terms, pricing and renewal history.
• Manufacturer authorizations, and whether they pass to a new owner. Some may require the maker's approval.
• Technician experience, certifications, pay and turnover.
• Parts inventory: count it, check its age, and value it at what it can actually be sold or used for.
• How much revenue comes from the largest customers, especially big commercial accounts.
• How often repairs have to be redone, and warranty claims on the company's own work.
• Vans, tools and diagnostic equipment, including software subscriptions some makers require.
• Pricing: trip charges and labor rates compared with local competitors, and when they last went up.
• Who answers the phone and schedules calls, and how quickly customers get a technician.

• What kinds of equipment do you service most, and which brands?
• How much of your revenue comes from maintenance contracts, and how many renewed last year?
• Which manufacturers have authorized you, and would those authorizations pass to a new owner?
• How long have your technicians been with you, and how are they trained?
• How much of your work comes from home warranty companies or other third-party warranty programs?
• How do you keep track of parts inventory?
• Which licenses or certifications does your work depend on?