Who Buys a Trade Company
- Larger contractorAdds technicians, customers and territory to an established company.
- Private equity backed platformLooks for steady service revenue and a team that can grow.
- Lead technician or managerKnows the work and needs financing and a transition plan.
Recurring Work Raises the Price
Buyers favor revenue that comes back: maintenance agreements, property managers who call you first and commercial accounts. A company living on emergency calls alone is harder to price than one with a base of repeat customers.
Cash Flow and the Multiple
Most Main Street businesses sell for about two to three times cash flow. Larger trade companies with managers in place may be priced on earnings after a market salary for the owner, and sometimes more.
Licenses and People
Trades depend on licensed people. Buyers ask which licenses the company holds, whose name they are under and whether they stay after closing.
If the master license is yours alone, plan the handoff early and ask the licensing board how a buyer qualifies.
Trucks, Tools and Inventory
Bring a vehicle list with vehicle identification numbers, ages and loans. Heavy inventory can strain bank financing, so right size it before listing.
Customer Concentration
If one builder or property manager is more than a fifth of revenue, buyers discount the price or walk away. Spread the work over several customers well before you list.
Can It Run Without You?
Buyers pay for a company that works while the owner is on vacation. A dispatcher, a lead technician and written pricing show it does.
Getting Ready
Clean up your books, check diligence needs and then find your sale price.