Service business valuation calculator and multiples by trade

How much is my service business worth?

A buyer of an owner-run service business usually pays a multiple of SDE, which is net profit plus the owner's pay and a few other add-backs. For service businesses sold on BizBuySell from 2021 to 2025, the middle half of sales landed between 1.75x and 3.13x SDE. Your trucks, equipment and a normal amount of inventory are normally part of that price, not extra.

Business value = SDE × multiple for your trade and size

Here is the example HVAC company from the calculator above. It had $1,200,000 in revenue and $120,000 of net profit after the owner paid himself.

Add-back rules follow the IBBA glossary definition of SDE and BizBuySell's recast list.

BizBuySell's 562 HVAC sales put the 25th percentile at 1.99x SDE, the median at 2.58x and the 75th percentile at 3.33x. At those multiples this company would sell for about $537,000, $697,000 or $899,000. The owner still works 45 hours a week and revenue sits a little under the HVAC median, but margins are healthy and sales are growing, so the calculator places it at about 2.5x, or roughly $676,000. Its $150,000 of trucks and equipment and $40,000 of parts inventory are part of that price.

Revenue matters less than profit. Two shops with the same sales can have very different SDE, and buyers pay for the cash the business produces. That's why the calculator starts from earnings and uses revenue only as a cross-check.

What is SDE, and how do you calculate it?

SDE, or seller's discretionary earnings, is the total cash benefit the business gives one full-time owner: profit before taxes, interest, depreciation, one-time or personal costs, and the owner's own pay. The IBBA defines it as earnings before those items and before "one owner's entire compensation, including benefits and any non-business or personal expenses paid by the business." Start from net profit and add those items back.

Sources: IBBA glossary; BizBuySell Learning Center articles on SDE (2022) and add-backs (2022).

BizBuySell's rule of thumb for any add-back is to ask whether a buyer would have to keep paying the expense after buying the business. Helen Guo, who writes about buying small companies, puts the same test this way:

"Rule of thumb for every add-back: if I remove this expense, does the business still function the same way on day one? If the answer is no, it's not an add-back. It's an operating cost."Helen Guo, post on X, September 27, 2026

Buyers and lenders recheck every add-back. Houlihan Lokey noted in its Q3 2025 facility and residential services update that deal valuations remained moderate, "largely as a function of more conservative EBITDA adjustments." Keep a receipt or a note for each line.

SDE vs EBITDA: which one applies to my business?

Use SDE if you work in the business and it would sell for under about $2 million. IBBA's Market Pulse survey prices deals under $2 million on SDE and deals from $2 million to $50 million on EBITDA. BizBuySell says businesses earning over $1 million to $2 million often switch to EBITDA because the buyer will pay a manager to run them.

The two measures differ by one salary. BizBuySell's guest article on the subject says "SDE equals EBITDA plus the normalized salary of one working owner." Adjusted EBITDA, in the IBBA's definition, replaces the owner's pay with the market-rate pay of someone hired to do the owner's job. Because EBITDA is the smaller number, EBITDA multiples are higher, and the article warns: "Just don't apply the EBITDA multiple to the SDE earnings and vice versa."

IBBA and M&A Source Market Pulse Q2 2026 (181 completed deals reported by 255 advisors); Morgan & Westfield; BizBuySell Learning Center.

To get from SDE to EBITDA you subtract what a manager would cost. There's no survey benchmark for that salary in home services. Morgan & Westfield says owner pay is normalized to a manager or CEO salary "which averages from $150,000 to $300,000 for most businesses in the lower-middle market." For context, DealStats' records of acquired companies show owners of construction firms with $1M to $5M in sales drew a median $116,530, and owners in the administrative, support and waste sector (which includes janitorial, landscaping and pest control) drew a median $126,886 at that size.

Mixing the two up is a common and costly error. One business broker calls it "the single most common valuation mistake I see": "Owners see a multiple quoted somewhere, apply it to the wrong earnings figure, and arrive at a number the market will never support." (@azbizsales1 on X, September 24, 2026.)

What are typical service business valuation multiples by trade?

On BizBuySell's 2021 to 2025 sales, median SDE multiples ran from 2.04x for pest control and 2.07x for cleaning up to 2.58x for HVAC, with all service businesses at 2.38x. The broader waste category, which includes septic and portable toilet companies, was higher at 3.14x. In most trades, the middle half of sales spans one to one and a half turns of SDE.

Multiples are sale price divided by SDE for businesses that sold. Median SDE margin is SDE as a share of revenue. BizBuySell trade figures come from each trade's own benchmark page; its HVAC page's cross-industry table has mislabeled rows, so this table uses the HVAC page's own quartile table. Averages run higher than medians because big deals pull them up: BizBuySell's 2025-only averages were 2.80x for HVAC (123 sales), 2.62x for plumbing (61), 2.94x for electrical (57), 2.56x for landscaping (211), 2.30x for cleaning (154) and 2.35x for pest control (28).

BizBuySell's service benchmark page describes who lands where: "Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile." Businesses with thin margins, full-time owner involvement and lots of direct competitors "will trade at or below the lower quartile."

How does business size change the multiple?

Bigger businesses sell for higher multiples. In IBBA's Q2 2026 survey, deals under $500,000 averaged 2.0x SDE, deals of $500,000 to $1 million averaged 2.8x, and deals of $1 million to $2 million averaged 3.1x. Above $2 million, deals averaged 4.0x EBITDA, then 5.8x EBITDA from $5 million to $50 million.

IBBA and M&A Source Market Pulse, Q2 2026 (published August 25, 2026). All industries, not only service businesses.

BizBuySell shows the same pattern by revenue across all industries it tracked from 2020 to 2024:

BizBuySell, "How business size drives valuation multiples," businesses sold 2020 to 2024. The page's top band is labeled "<$20MM," which looks like a typo for over $20 million, so it's left out here.

BizBuySell gives two reasons. Larger companies "tend to have a larger and more diversified customer base, more consistent revenue streams, and larger employee base," so they're less likely to stumble when the owner leaves. And financing: bigger earnings give a buyer "more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable income." Lenders look for a debt service coverage ratio of about 1.25 or higher, and buyers usually bring 10% to 20% of the price in cash.

Each BizBuySell trade page also names its own size breakpoints. The calculator uses these to place you within your trade's range:

• HVAC: over $2.5 million in sales, "well over 3"; under $1 million, "around 2 times."
• Plumbing: over $2 million in sales, over 3x; under $600,000, below 2x.
• Electrical and mechanical: around $3 million in sales, about 3x; under $1 million, below 2x.
• Landscaping: around $1.5 million, over 3x; under $400,000, about 1.7x or lower.
• Cleaning: around $900,000, 2.7x or higher; under $250,000, closer to 1.6x.
• Pest control: over $600,000, 3x or better; under $200,000, closer to 1.7x.

How much are HVAC, plumbing, landscaping and other service businesses worth?

The middle half of owner-run sales in the major home-service trades falls between about 1.6x and 3.3x SDE, with the trade setting the middle of the range and size and quality setting where you land. The sections below give each trade's sold-deal figures, what buyers in that trade pay extra for, and real deals owners and buyers have posted.

How much is an HVAC business worth?

BizBuySell's 562 HVAC sales from 2021 to 2025 had a median multiple of 2.58x SDE, with the middle half between 1.99x and 3.33x. The median HVAC business sold for $750,000 on $1,482,016 of revenue and $304,309 of SDE, or 0.56x revenue. BizBuySell says HVAC businesses "tend to receive a valuation premium over other building and construction related companies, relative to their median revenues."

Real deals line up with that range. Rob Brooks bought a residential HVAC company in Central Florida with $1.95 million in revenue and $343,000 in SDE and wrote: "But I got into a highly sought-after market at 3.2x. Purchase price: $1.1M." (X, December 20, 2025). HVAC and plumbing advisor Will Schryver looked at a listing asking $4 million for a company with $1.8 million in revenue and estimated SDE "closer to $400k" and value "closer to $1.2 million to $1.4 million" (X, January 31, 2026).

Buyers pay more for residential service and maintenance plans than for new construction. PKF O'Connor Davies reports that some buyers treat 20% to 30% of revenue from new construction as the acceptable limit for a stand-alone acquisition. Brentwood Growth, a trades broker, says "a base of active maintenance agreements can add 1x to 1.5x on top of the multiple your business would otherwise command." Larger HVAC companies sold to private equity trade on EBITDA: Kroll says smaller tuck-in acquisitions trade at "three to eight times," while high-quality platforms get "mid-teens" multiples.

How much is a plumbing business worth?

BizBuySell's 226 plumbing sales had a median of 2.24x SDE and a middle half of 1.66x to 3.15x. The median plumbing business sold for $638,730 on $1,174,514 of revenue and $311,598 of SDE (0.59x revenue). Size matters a lot here: BizBuySell says plumbing businesses with over $2 million in sales go for over 3x, and those under $600,000 for below 2x. In 2025 alone, the 61 plumbing sales averaged 2.62x.

Viking Mergers & Acquisitions puts smaller plumbing firms at 2x to 3x SDE and larger, established ones at 6x to 11x EBITDA. Distressed shops can go for far less: John Wilson, who grew his family's plumbing company, told Acquiring Minds he bought a struggling competitor for $110,000 on a six-year seller note in 2018 (March 14, 2024).

How much is an electrical contracting business worth?

BizBuySell groups electricians with mechanical contractors. Its 266 sales had a median of 2.56x SDE (middle half 1.96x to 3.15x), a median sale price of $950,000, median revenue of $1,724,323 and median SDE of $385,902. Businesses with around $3 million in sales sold for about 3x; those under $1 million for below 2x.

Above the owner-operator level, Cascade Partners reports that electrical contractors with under $5 million of EBITDA "typically transact with PE add-on buyers or smaller strategics in the 3.0x-4.5x range," and that contractors with 25% or more recurring revenue "can command one to three turns of multiple premium relative to pure project-based peers."

How much is a landscaping or lawn care business worth?

BizBuySell's 945 landscaping and yard service sales had a median of 2.30x SDE, a middle half of 1.70x to 3.01x, and a median sale price of $425,000 on $708,412 of revenue. BizBuySell says landscaping trades at a discount because of low barriers to entry and heavy competition, and that "Annual revenue above $1MM is key to getting a decent valuation multiple." Buyers look for maintenance agreements, long-term contracts and commercial accounts. Around $1.5 million in sales, multiples top 3x; under $400,000, they're about 1.7x or lower.

When earnings are negative, buyers value the pieces instead. Nolan Gore, who runs a landscaping company, bought a money-losing competitor doing about $2 million in revenue. He offered $400,000: $175,000 for vehicles and equipment, $50,000 for the crew and $175,000 for the client list. The deal closed at $371,000 plus a $1,500-a-month contract for four years, about $443,000 in total. His explanation: "(4x a negative number is a negative price)" (X, March 11, 2024).

Lawn care companies bought by private equity trade on EBITDA. Principium White Oak, an M&A advisor, says lawn care companies under $10 million in revenue have traditionally sold for 5x to 8x EBITDA. PCO Bookkeepers notes that private equity usually enters by buying a company doing $20 million or more, then rolls up smaller firms "at lower multiples."

How much is a cleaning business worth?

BizBuySell's 797 cleaning and janitorial sales had a median of 2.07x SDE and a middle half of 1.57x to 2.66x, the tightest range of any trade here. The median business sold for $260,000 on $433,327 of revenue and $136,326 of SDE. BizBuySell says size and the number of recurring cleaning contracts drive value most: around $900,000 in sales, multiples reach 2.7x or more, while businesses under $250,000 sell closer to 1.6x. Many sales in this category are franchise units.

Clean books make a big difference. A Florida broker who posted his own closings on Reddit sold one janitorial company for $159,500, "close to a 1x of advertised SDE, but books and records were very messy," and another for $1,195,000, "a little over 3x SDE. SUPER Clean and Organized books" (r/sweatystartup, March 10, 2026).

How much is a pest control business worth?

BizBuySell's pest control data shows a median of 2.04x SDE with a middle half of 1.69x to 3.00x. Pest control has the highest revenue multiple of any trade here, a median 0.96x, helped by a median SDE margin of 47.1%. BizBuySell credits "high average profit margins" and a service that "lends itself to recurring revenue and lower customer turnover." Businesses with over $600,000 in sales sell for 3x SDE or better; owner-operated shops under $200,000 sell closer to 1.7x.

The NPMA and PCO Bookkeepers 2025 cost study of 246 pest control firms found recurring revenue made up 74% of total income and average operating profit was 15%. Public pest companies trade at far higher multiples (Lincoln International listed Rollins at 34.7x EBITDA at the end of 2025), but those numbers don't apply to a local company.

How much is a roofing company worth?

BizBuySell publishes no roofing page. Legacy ETA's analysis of more than 200 roofing and exteriors sales in the DealStats database puts the 25th percentile at 1.6x SDE, the median at 2.2x, the 75th percentile at 3.1x and the 90th at 4.6x, with a median of 0.39x revenue. Priced on EBITDA, the median was 3.3x.

Legacy ETA adds that private equity "may pay 6-9x EBITDA, but usually only for businesses with $3 million or more in EBITDA, recurring or commercial revenue, and an established management team." Hyde Park Capital reports roofing acquirers "prioritizing re-roofing and service revenue over new construction."

How much is a pool service business worth?

Pool routes are priced on monthly recurring service revenue, not on earnings. Chris Webb of National Pool Route Sales told Pool Magazine his firm values a pool company on a multiple of the monthly recurring service rate that "can typically range from eight to twelve times the service rate" (August 25, 2024). Skimmer, a pool service software company, puts routes at six to twelve times monthly service revenue, and Poolside Business Brokers says 10 to 12 times. Skimmer's example: a route grossing $10,000 a month in service might sell for $60,000 to $120,000. Repairs and one-off jobs are often left out of that math.

Watch the word "monthly." Eight to twelve times monthly revenue is less than one year of revenue, so a page quoting "8x revenue" for a pool route has dropped a word. Larger pool companies sold to private equity trade on EBITDA; Founders Advisors put pool services at 6x to 8x EBITDA for middle-market deals in 2024.

What about garage door, pressure washing and handyman businesses?

No sold-deal dataset covers these trades. BizBuySell has no benchmark page for them, so the calculator falls back on its range for all service businesses (1.75x to 3.13x SDE) and says so. For garage door companies, one M&A advisor, John M. Salony, says they "typically sell for 2.5x to 4.0x SDE, or more," without publishing deal data. Private equity has paid far more for large garage door platforms: PitchBook reports Guild Garage Group sold for $800 million at 16x EBITDA, a platform price that doesn't apply to a local shop.

For small companies in these trades, the Florida broker quoted above offers a starting point: "Buyers and Lenders tend to focus on SDE for main street business sales, and a reasonable rule of thumb is 2x SDE." He listed one pressure and soft washing company he sold for $275,000.

Can you value a service business based on revenue?

Only as a rough cross-check. Buyers pay for earnings, and two businesses with the same revenue can have very different profit. Service businesses sold on BizBuySell at a median 0.71 times revenue, and trades ranged from 0.54x for electrical to 0.96x for pest control, mostly because their margins differ.

A one-person plumbing and HVAC owner in Massachusetts asked Reddit what his business was worth. He'd made over $175,000 on $382,000 of revenue and had heard of "a 1.25 multiplier to get a price for a company based off of gross sales," so he guessed $477,500. A reply: "You might get 125 if you're lucky," followed by "you're basing the value of the business on your revenue and not your income" (r/smallbusiness, May 12, 2025). With no employees, most of that $175,000 is the owner's wage for doing the work, and a buyer has to do that work too.

What raises or lowers a service business's multiple?

Recurring revenue, low owner involvement, size, a spread-out customer base, steady growth and clean books push a business toward the top of its trade's range. Full-time owner involvement, thin margins, a few big customers and messy records push it toward the bottom. The table shows what the sources say about each factor and how the calculator uses it.

The calculator averages the seven scored factors and places you between your trade's 25th and 75th percentile. It never adds recurring revenue value on top of the multiple, because recurring revenue is already one of the reasons a multiple is higher.

The top of the published range is not a ceiling. BizBuySell says the strongest businesses sell "at or above the upper quartile," but no source says how far above, so the calculator stops at the 75th percentile.

Why do private equity buyers pay higher multiples?

Private equity firms buy smaller companies at lower multiples, combine them into a platform, and sell the platform at a higher multiple. Residential HVAC platforms have sold for around 15x to 20x EBITDA, but small add-on acquisitions get far less, and most owner-run shops sell to individuals on SDE, not to private equity.

Jacques Zureikat of Houlihan Capital described the model to ACHR News: "they buy up all these smaller contractors for six or seven EBITDA, and they flip them for 17 times after they've done all the integration work" (May 21, 2025). A private equity investor quoted by PitchBook on garage door roll-ups said the same: "If we can buy in at 6 to 7 times and sell for 12, we've made a huge home run." Capstone Partners notes bolt-on acquisitions "typically trade at lower purchase multiples than platform acquisitions," and Principium White Oak expects lawn care platforms to "average down" by offering lower valuations for add-ons.

Platform prices describe companies with tens of millions of dollars in EBITDA. Schryver's list includes Champions Group at about 18.5x on "$130m+ Adj. EBITDA" in 2026.

To be a platform, a company has to be big. PKF O'Connor Davies says middle-market investors see $10 million or more of EBITDA as "the critical size justifying a significant multiple expansion" in HVAC. In pool and spa, investors want sales starting at $10 million and EBITDA over $500,000, "preferably closer to the $1 million to $2 million range," according to Pool & Spa News. Below those sizes, private equity is an add-on buyer. Schryver reported two recent HVAC add-ons that closed at about 7x (under $1 million of EBITDA) and about 11x (under $5 million of EBITDA), "both 100% cash at close" (X, March 23, 2026). He also notes that multiples "contract quickly for an HVAC or Plumbing company that doesn't fit the ideal profile," meaning mostly residential with little construction work.

Private equity offers often include rollover equity, a stake in the combined company. It can pay off at the next sale, but it isn't guaranteed. A former executive at a PE-owned plumbing company wrote that his team's equity "was 'B' shares so the short version of that is that it was only theoretically valuable" (r/Plumbing, June 3, 2024).

How do I prepare my service business to sell?

Give buyers numbers they can trust and a business that runs without you. That means three years of clean books, documented add-backs, more recurring revenue, less dependence on the owner and records a buyer can check. Most owners don't prepare: in BizBuySell's Q2 2026 survey only 14% had a professional valuation, and 35% had no idea what their business was worth.

1. Clean up three years of books. BizBuySell's due diligence list starts with income statements, balance sheets and "Tax returns for at least the past three years," plus a statement of SDE.
2. Document every add-back. Keep receipts for personal and one-time expenses. Buyers and lenders apply the day-one test to each line.
3. Grow recurring revenue. Sell maintenance plans and service agreements. A Reddit commenter wrote that the first question PE groups ask is "how many maintenance plans do you have in your database?" (r/buyingabusiness, March 3, 2026).
4. Make yourself less necessary. Brokers in BizBuySell's Q2 2026 report named minimized owner dependence, clean financials, recurring revenue and experienced management as prerequisites for a sale.
5. Spread out your customers. If one account is a large share of revenue, add others before you sell.
6. Keep job and customer records in one place. Buyers want to see job history, customer counts, recurring plan counts and revenue by month.
7. Plan early. Pepperdine's 2026 survey found 64% of sellers had no formal planning before hiring a broker.

If you run the business on field service software, much of that record builds as you work. In Claver, for example, every job and invoice stays on the customer's history, recurring plans bill customers automatically, reports summarize the numbers, and you can export all of it to CSV for a buyer or broker. Software won't raise your multiple by itself, but it makes your numbers easier to prove.

How long does it take to sell a business, and what does it cost?

Plan on six to ten months from hiring a broker to closing for a Main Street business, and 11 to 12 months for a lower-middle-market company, per IBBA's Q2 2026 survey. Broker commissions run about 8% to 15% on deals under $1 million, depending on the source, often with a minimum fee; a formal valuation costs roughly $2,500 to $8,000 or more.

Most small buyers finance with an SBA loan: 78% of buyers in BizBuySell's Q2 2026 survey expected to use one, and 90% expected some seller financing, while only 29% of owners planned to offer it. SBA loans don't allow earn-outs, per the IBBA glossary, so small deals that need a bridge between buyer and seller usually use a seller note instead. Smaller deals also draw fewer bidders: IBBA advisors say deals under $500,000 "frequently receive just one or two offers."

What do real owners and buyers report?

Closed small deals that owners and brokers have posted publicly land between about 1x and 3.5x SDE, in line with the published data. Practitioners also say broker asking prices often run well above what deals close at, usually because of inflated add-backs. These are self-reported and unaudited, so treat them as examples, not data.

• Residential HVAC, Central Florida: $1.95M revenue, $343K SDE, bought at 3.2x for $1.1M. In a later post, the buyer reported "Only 2 of the 10 employees from the acquisition are left" (Rob Brooks, X, March 19, 2026).
• HVAC, Seattle: about $3.5 million in sales and $500,000 of EBITDA, bought for $1.75 million in 2017, about 3.5x. The buyer, Jerod Pierce, later turned down a $95 million offer for the grown company: "I like you a lot, but the certainty of close isn't there" (Acquiring Minds, September 15, 2025).
• Janitorial, Florida: one broker's closings ran from about 1x SDE with messy books to "a little over 3x" with very clean books. His summary of all his sales: "anywhere between 1x-4x of SDE."
• Landscaping: a money-losing $2M-revenue company sold for its trucks, crew and client list, about $443,000 including a four-year contract (Nolan Gore, above).
• Cleaning, 12 months old: $230,000 of revenue at a 23% margin. An experienced owner replied: "At most you're looking at $150k sale and that's generous for a business with no actual run data" (r/sweatystartup, February 2025).
• Asking prices: buyers regularly push back on HVAC listings at 5.5x to 5.8x SDE, such as one "with $600K SDE for $3.5M" (Steve Tolger, X, June 3, 2025).

Owners also describe the pressure to sell. John Wilson, whose family plumbing company grew under his leadership, wrote: "There's nothing wrong with selling because all companies will either close down, or sell to someone else" (r/AMA, June 18, 2026). Tiago Santana of The Cooling Company told ACHR News that a private equity "three-to-five-year exit window can't preserve" the relationships that make a home-services company worth owning (August 13, 2026).

How this calculator works

The calculator builds SDE from your numbers, takes your trade's published 25th percentile, median and 75th percentile SDE multiples, and places you inside that range by averaging seven factors that sources say move a multiple. Larger businesses switch to EBITDA. Every multiple is published; the scoring scale is ours.

• Earnings. SDE is net profit plus one owner's pay, interest, depreciation and amortization, one-time costs and personal expenses (IBBA definition). EBITDA is SDE minus the manager salary you enter.
• Method. Auto picks EBITDA when the SDE-based price reaches $2 million (IBBA's split) or SDE reaches $1 million (Morgan & Westfield; BizBuySell says $1 million to $2 million). You can override it.
• SDE range. Low, typical and high come from the trade's BizBuySell sold-deal table (Legacy ETA's DealStats analysis for roofing). Trades without data use BizBuySell's all-service figures.
• EBITDA range. Three published figures that match your size: DealStats' median by net sales (3.0x under $1M, 3.7x at $1M to $5M, 4.5x at $5M to $10M, 7.0x over $10M), Pepperdine's 2026 median by company EBITDA for construction or business services, and IBBA's Q2 2026 average for the matching purchase-price band. Low is the lowest, high the highest, typical the middle one.
• Placement. Each factor scores from -1 (toward the low end) to +1 (toward the high end); the average sets where you land. Size uses each trade page's own breakpoints, recurring revenue uses the 0%, 25% and 50% marks from Founders Advisors and Cascade Partners, and growth uses Founders' 5% and 20% marks. The owner-hours, customer-concentration, margin and years-in-business scales are our own judgment, applied in the direction the sources give.
• Assets. Vehicles, equipment and a normal level of inventory are treated as part of the price, as brokers usually do, so they aren't added on top. If the earnings-based value is lower than those assets, the calculator says so.
• Pool routes. Monthly recurring service revenue (revenue times your recurring share, divided by 12) times 8, 10 and 12.

What it can't see: your local market, the quality of your crew, the condition of your trucks, your lease, your reviews, and whether a particular buyer wants your territory. Treat the result as a starting point for a conversation with a broker or appraiser.

Service business valuation FAQ