Written on: December 16, 2025
Can you build value in the long term — even on the most hectic days?
By Jeff Simpson
As someone whose business is about helping propane providers achieve long-term financial success, I can tell you that this is the time of year when many companies lose sight of their “big picture” value-growth plans.
Winter brings a host of immediate issues and challenges for propane companies: securing supplies, hiring skilled seasonal help, keeping routes and automatic schedules current — and that doesn’t even account for the sudden fire drills that extreme weather brings. However, you must be as focused on long-term value as you are on short-term profitability and success. It is all too easy to deprioritize financial and strategic decisions and ignore your financial advisors’ recommendations while you’re managing deliveries, pricing pressure and staffing strain.
The companies that grow — year after year — are the ones that stay aligned with a clear financial strategy. Strong KPIs, disciplined receivables and tight cash management help, but what really sets best-in-class operators apart is intentionality: committing to your big-picture plan even on the toughest days.
Here are ways that areas where propane companies can strengthen long-term value while still driving strong seasonal results.
Protect Your Margins
Margin discipline is the most important driver of your valuation. Yet many propane retailers still rely on gut instinct or competitor behavior when setting prices instead of using true cost data.
Costs are rising across the board, from driver wages to vehicle expenses and the cost of propane tanks. Insurance and regulatory compliance costs show no signs of decreasing anytime soon. If you don’t build those costs into your margin strategy, winter will expose the gap.
Build your pricing around real, updated cost structures, and keep the margin decision-makers far away from customers — who invariably pressure you toward pricing that runs contrary to your growth plans. When you’re budgeting, assume higher costs than expected and set margin targets accordingly. Consistently strong margins support better financing terms, expansion opportunities, and ultimately a stronger valuation when it’s time to sell.
Grow Recurring and Repeating Revenue
Propane companies with strong recurring and repeating revenue streams are more stable and valuable. Recurring revenue comes from predictable, contract-based programs like:
• Propane tank leases
• Service plans
• Subscription-based protection or monitoring programs
Repeating revenue comes from loyal customers who come back year after year:
• Automatic delivery customers
• High-control tank percentages
• Equipment installation and service work
These revenue streams reduce seasonal volatility and give lenders and buyers confidence. But growing these streams requires a workforce that is consistently selling to customers with every interaction. It’s a good idea to train your team to communicate the value of these programs and incentivize them to promote products and services that build long-term customer relationships.
Keep One Eye on Your EBITDA Target
In the propane industry, your year is judged heavily by winter performance. That’s why every company should enter the season with a clear EBITDA target.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the benchmark lenders and buyers use to determine financial strength. Knowing your minimum target helps ensure you can cover debt, fund operations and meet ownership income goals. Understanding the earnings range of similar companies also enables you to know what’s realistically possible.
Your target should come from your budget, with input from advisors or brokers who understand propane business models. Without it, it’s impossible to judge whether your season is strong — or if you’re quietly falling behind.
The Bottom Line for Your Big Picture
It’s easy to get lost in the winter whirlwind. But the decisions you make during peak season shape the story you’ll tell your bank, your partners and your future buyers.
By protecting margins, expanding high-value revenue streams, and managing toward a clear EBITDA goal, you’ll not only perform well this winter you’ll build a business that’s stronger, more resilient and worth more in the long run.
Jeff Simpson is the founder and managing member of Notch Capital, a private investment firm specializing in buyouts and recapitalizations of lower middle market businesses in the propane and home services industries. Notch Capital also provides advisory services to help these businesses strengthen their performance and analyze acquisitions.
