Selling his business to a private equity firm was a challenging decision for Travis Smith. Especially since Smith, president of Sky Heating, AC, Plumbing, and Electrical had worked in the family business practically since he was still in diapers.
Based in Portland, Ore., Sky Heating is a $25 million trade company with about 100 employees. Smith worked in every facet of the business before assuming leadership and subsequently buying out ownership from his father and other business partners.
Smith recognized that plenty of change was necessary to boost the company’s annual revenue numbers. He implemented an advertising strategy and rebranded the business. Most importantly, he partnered with private equity company P1 Service Group.
“It adds a huge safety net to our team,” Smith says. “Not only do they have that ownership, but financially we're so much stronger when we've got a much larger backing behind us.”
For example, instead of leasing or financing vehicles, Sky owns everything and/or paid with cash.
“There's no notes coming due on anything,” Smith says. “There's no worrying about interest rates. None of that stuff matters anymore. But also, our growth hasn't slowed. We’re both stable and have high growth at the same time.”
Before joining P1 Service Group, Smith says, he didn’t realize how many different ways his attention was being pulled.
“There are a lot of hats we wear as an owner,” he says. “The Group has people for all that. They have somebody that does recruiting. Marketing. They have somebody that implements new software or a new accounting system, or payroll.”
Smith believes he’s found the perfect middle ground for running a business.
“You might think that taking on a boss would be this awful thing after working for myself for 10 plus years,” he says. “I ran pretty autonomously, but I still run very autonomously.”
Yet, Smith now has leadership that helps him advance his company.
“The leader is the weakest link at your company,” he says. “If I'm running a $10 million company, I'm a $10 million leader, otherwise the company would be bigger. So, as I have people above me helping, it allows me to be a better leader to then bring the company to the next level.”
Travis Smith recently joined ServiceTitan’s Jackie Aubel as part of Season 7 of the “Toolbox for the Trades” podcast, which included Smith’s thoughts on:
Early ownership struggles and changes. (5:44)
The importance of advertising. (16:46)
The decision to partner with a private equity group. (23:33)
The benefits of using a “letter of intent.” (32:34)
Advice for owners considering private equity. (41:34)