So I sold my HVAC company about 8 months ago. Part of the deal was a 12-month consulting gig to help the new owner transition. The problem is we disagree on almost everything , he wants to cut costs by reducing maintenance staff, I think that's suicide for the recurring revenue. He's also ignoring my advice on keeping the old dispatch software because he's convinced some shiny new AI tool will solve all his problems. I'm supposed to be "consulting" but it feels like I'm just watching him drive the truck off a cliff. Has anyone dealt with this? How do you handle it without blowing up the earn-out?
Consulting
How to handle disagreements while consulting for the buyer
You don't. You document the advice, you send it in writing, and you cash the check. I'm not even being sarcastic. Your job is to consult, not to force him to not run it into the ground. He bought the thing — it's his to break now.
@CoffeeStainedDesk is mostly right. But the earn-out complicates it. If there's an earn-out tied to revenue/EBITDA, his bad decisions directly cost you money. Read your contract. Do you habe any consent rights on major operational changes? Usually you don't, but it's worth checking.
I'm on the buyer side of these things, and I'll say this: the consultant who keeps saying "we did it this way for 20 years" is the one I tune out. Your HVAC maintenance staff idea might be right, but if you're delivering it as "you're wrong," you're just the guy who won't let go.
Fair point, @northwind_88. I probably have been a bit of a bulldozer. But I've seen three competitor gut their maintenance departments and lose their commercial contracts within a year. That's not nostalgia, that's just pattern recognition.
Document, document, document. Send a nice "per our discussion on Tuesday, here's my concern about X" email after every meeting. It feels petty, but it's basically insurance. If he comes back later saying you didn't warn him, you've got a paper trail.
question for you OP - is the earn-out based on the numbers YOU left behind, or on what the business does does under him? If it's a flat earn-out tied to a fixed period regardless of performance, honestly just smile and nod.
It's tied to revenue during the 12 months. So yeah, his decisions matter to my wallet. @FoldTheLaundry it's not a flat payment, unfortunately.
Then you've got a real conflict. But here's the thing — you cant manage the business anymore. Best move is probably to pick 2 or 3 things that matter most to the revenue and fight only for those. Let the software thing go. He'll figure that out on his own.
Have you actually tried asking him questions instead of giving him answers? Like "what's your plan if commercial clients start asking about response times when the maintenance crew is cut?" Sometimes people need to get to the conclusion themselves. Also, lawyers don't come cheap, but a quick call to your deal counsel about the the earn-out structure wouldn't be the worst idea.
lol the AI dispatch software. those are always a fun way to spend six figures. please keep us posted on how that goes.
The question thing @GrumpyOwl mentioned actually works. I had a seller who did that to me and I didn't even realize I was being guided until about a month in. It felt like my idea. Which is exactly the point.
Also worth remembering: sellers who win the argument but lose the relationship usually end up with neither. You only have 12 months. Pick your battles.