Questions a plumbing buyer will ask
How much is service and repair versus new construction?
Repair and replacement calls come back every year. New construction can be steady, but margins are thinner and it often depends on a few builders.
Whose license is the company working under?
If the master license is yours personally, the buyer needs a plan to replace it before closing. This is often the first question a buyer's attorney asks.
Will your plumbers stay?
Licensed plumbers are hard to hire. Head count, tenure, pay and any key person who might leave all affect the price.
How do customers find you?
Repeat customers, property managers and steady referral sources are worth more than paid ads that stop when the budget stops.
Service Work Carries the Value
Buyers of plumbing companies are mostly paying for recurring demand. A company with a big base of homeowners and property managers who call it first is easier to sell than one that lives job to job.
If you have service agreements, maintenance plans or a list of commercial accounts that call you every month, pull the numbers together. They tell a buyer the phone will keep ringing.
The License Question
Plumbing is licensed locally in this metro, and contractor licensing often runs through a person, not just the company. If that person is you, the buyer has to solve it.
Sometimes a licensed employee steps up. Sometimes the buyer brings their own. Either way, raise it early with your attorney so it doesn't hold up closing.
What Your Numbers Need to Show
Buyers will look at gross margin by job type, how much of your revenue comes from your own labor, and whether your trucks and tools are owned or leased.
They will also recast your pay and perks. A family truck or a spouse on payroll gets added back if you can document it. See what is my business worth for how that works.
Who Buys Plumbing Companies
Home service groups, many backed by private equity, have been buying plumbing, heating and electrical companies across the region. Competitors buy to add plumbers and service area.
Individual buyers with trade or management backgrounds often use SBA financing, which brings a lender's appraisal into the deal. Our seller financing page explains what that means for you.
Getting Ready a Year Out
If a sale is a year or two away, a few changes pay off. Get a second licensed plumber in place. Move more of your work onto maintenance plans or repeat commercial accounts. Clean up job costing so margins are easy to read.
Most of all, step back from answering every call. A company that books, dispatches and bills without you is worth more to every buyer.
Keep sales steady in the meantime. Buyers get nervous about a dip, and they question a sudden jump just before a sale.
Wrapping Up the Paperwork
After closing you will close your Missouri tax accounts, settle your unemployment account and file a final personal property declaration on your trucks and equipment. The seller filings guides cover each one.
For a private estimate, send the form or call (816) 555-0167.