Real math. Plumbing-specific case studies. The exact checklist PE buyers use to evaluate your company - and how to score higher on every factor.
Not all revenue is created equal. A dollar of recurring contract revenue is worth 2-3x more than a dollar of one-time project revenue. Buyers know this. Most plumbing company owners don't.
Here's the simplest lever you can pull: convert 10-15% of your project revenue to recurring maintenance contracts. Not a total overhaul. Just a shift in how you package what you already do.
Take a $6M plumbing company at a 4.5x EBITDA multiple.
Pest control companies command 6-9x EBITDA - the highest multiples in home services. Why? Not because killing bugs is harder than fixing pipes. Because they figured out recurring revenue decades ago.
Monthly or quarterly treatments. Annual contracts. Automatic renewals. The average pest control company has 70-80% recurring revenue. The average plumbing company? Under 10%.
Rollins (Orkin's parent) trades at over 40x EBITDA on public markets. Terminix sold for over $6B. The businesses that figured out recurring revenue in trades get valued like SaaS companies - not like job shops.
The plumbing companies that adopt this model are the ones PE firms pay premium for.
You don't need to reinvent your plumbing business. You need to package what you already do into a predictable, recurring format. Start with your highest-repeat service line and build from there.
Here's the test: Can your plumbing business run for 4 weeks without you?
Not "limp along with daily phone calls from the beach." Actually run - dispatch trucks, quote jobs, close sales, handle callbacks - without you touching anything.
If the answer is no, your multiple is getting discounted by 20-40%. On a $1.2M EBITDA plumbing company, that's a $960K-$1.9M penalty.
This is the single biggest value killer in plumbing. Most plumbing owners started as plumbers. They're still in the truck mentally, even if they haven't held a wrench in years. The estimating, the key customer calls, the "I'll handle this one" - it all adds up to a business that can't survive without its founder.
Score yourself honestly. Each "no" is costing you real money at exit.
Months 1-3: Document everything. Every estimating process, every dispatch procedure, every customer communication template. Use Loom videos for job-site walkthroughs. Get the knowledge out of your head and into a system your team can follow.
Months 4-6: Hire or promote your operations manager. Give them real authority - not just a title. Let them handle the daily fires. This is expensive short-term and worth millions at exit.
Months 7-9: Step back from customer relationships. Introduce your project manager or account lead to every key builder, property manager, and commercial client. Start with the smallest accounts and work up.
Months 10-12: Take 4 weeks off. Don't check in. If the trucks roll, the jobs get done, and the bills get paid without you - you've done it. If they don't, you know exactly what still needs fixing.
This isn't about making yourself useless. It's about proving to a buyer that the machine works without you. That proof is worth millions in a plumbing company exit.
Private equity firms and strategic buyers evaluate plumbing companies on the same six factors. Every single time. This isn't a secret - it's just that most plumbing company owners never see it from the buyer's side.
Here's the exact scorecard. Grade yourself honestly on each one.
Green on all six? You're in a strong position. Go to market with confidence. You'll likely command 6-8x EBITDA - the top of the plumbing company range.
Yellow on 1-2? Fix them before you sell. Each improvement is worth 0.5-1.0x on your multiple. On a $1.2M EBITDA plumbing company, that's $600K to $1.2M per fix.
Red on 3+? You need 12-18 months of preparation before going to market. Selling now means leaving significant value on the table. The good news: now you know exactly where to focus.
Most plumbing company owners think about selling and then scramble to prepare. The smart ones prepare for 18-24 months, then go to market from a position of strength.
Every item on this scorecard is fixable. But fixing them takes time. The earlier you start, the more you keep.
A $10M plumbing company that scores well on all six factors might sell for $60-80M with a strong PE buyer running a roll-up. The same company with red flags everywhere might get $30M - or scare buyers off entirely.
The difference isn't the business. It's the preparation.
I had no idea recurring revenue would change my multiple that much. We added maintenance contracts and went from a 4.2x to a 5.8x offer in under 14 months.
Plumbing company owner - TX, $7.2M revenue
The owner dependency checklist was a wake-up call. I thought I was delegating. I wasn't. Took 10 months but my ops manager now runs the day-to-day completely.
Plumbing company owner - FL, $4.8M revenue
Used the buyer's scorecard to identify our weak spots before going to market. Fixed two red flags. The PE firm that acquired us said our documentation was the best they'd seen.
Plumbing company owner - OH, $11M revenue
Take the 5-minute assessment to see where your plumbing company stands across all six buyer criteria - with specific recommendations for your revenue size and service mix.
No sales pitch. No phone call. Just your score and what to do about it.
You built something worth protecting. Make sure you get paid for it.
What's Next
You now know the 3 levers. Next step: find out exactly where your plumbing business stands today.
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