What is my HVAC or plumbing business worth, and how do I raise it?

The short version

A buyer is not paying for your trucks. A buyer is paying for the profit your shop will keep making after you leave. So valuation is two things: a profit figure, and a multiple (the number you multiply it by). Everything else in this article is about getting a bigger profit figure that a buyer believes, and a bigger multiple.

Two profit figures: SDE and EBITDA

Small shops are priced on SDE, short for seller's discretionary earnings. It is your net profit plus your own pay, your perks and one-time costs. It answers: how much money does one owner-operator take home?

Bigger shops are priced on EBITDA, short for earnings before interest, taxes, depreciation and amortization (a standard way to measure profit before financing and accounting choices). EBITDA treats the owner's pay as a normal cost, because a buyer will have to hire a manager to replace you.

Advisors disagree on where the line sits. One advisor page says shops under about $3 million in revenue use SDE. Another, aimed at larger companies, says about $2 million of value. Ask any broker which one they will use for your size.

What do sold shops actually go for?

These figures come from advisor pages that cite sold-business data, and one attributes its median to BizBuySell, a marketplace where businesses are listed for sale. They are averages, not offers. Treat them as a range to test your own shop against.

Size	Basis	Typical multiple
HVAC under $1 million revenue	SDE	Close to 2.0x
HVAC over $2.5 million sales	SDE	Often above 3.0x
HVAC average, 2021 to 2025	Earnings	2.75x (range 2.40x to 3.40x SDE, 3.40x to 7.80x EBITDA)
Plumbing average, 2021 to 2025	Earnings	2.47x
Larger HVAC, $5 million to $200 million	Adjusted EBITDA	About 4.0x to 10.0x, midpoint 6.5x
Plumbing firms bought by investors	EBITDA	4x to 7x

The same advisor page reports the median HVAC sale price rising from $650,000 to $800,000 between 2021 and 2025. Another page puts the median at about 2.6 times SDE. Numbers vary by source and year, so use them to frame the conversation, not to set a price.

Why are private equity firms buying plumbing and HVAC shops?

Private equity (PE) firms are investment funds that buy companies, improve them and resell. They like trades for three reasons that advisor pages repeat:

• Steady income. Maintenance plans and repeat customers make revenue predictable.
• Lots of small owners. One advisor says over 90 percent of plumbing companies are solo operators or small shops, so a fund can buy many and combine them.
• A price gap. The same advisor says a standalone HVAC company might be worth 5.5 times EBITDA and a plumbing one 5 times, while a combined multi-trade platform with cross-selling could reach 6.5 to 7.5 times. Buying small and selling big is the profit.

That advisor says funds want about $300,000 to $500,000 of EBITDA before treating a shop as a platform, and that smaller shops with $100,000 to $300,000 are usually folded into an existing platform. So if you earn less than that, your likely buyer is a person or a local competitor, and the SDE numbers above are the better guide.

What moves your multiple up or down?

Factor	Effect, per one advisor
Maintenance agreements (recurring revenue)	Up 0.5 to 2 turns
Management that runs without you	Up 1 to 2 turns
Larger size	Up 1 to 2 turns
You are the top salesperson, estimator or technician	Down 1 to 2 turns
A few big customers make most of the revenue	Down 0.5 to 1.5 turns

A turn is one full step of the multiple, for example from 3.0x to 4.0x. The same advisor says roughly half of HVAC businesses that go to market fail to sell, often because the buyer sees the owner as the business. Shops built on new construction work sit lower than shops built on service and replacement.

What does an HVAC shop actually earn?

Sources conflict, and most are consultants or software sellers. A consultant page says a typical HVAC company nets 8 to 15 percent of revenue, with the best at 16 to 20 percent. Another cites a 2024 survey by the trade group ACCA (Air Conditioning Contractors of America) with a median net margin of about 5.8 percent and a top quarter at 13.2 percent. The gap is mostly a sign that many owners do not calculate net profit the same way.

The consultant page also says maintenance agreements earn 45 to 55 percent gross margin, against 30 to 38 percent for service work and 18 to 25 percent for equipment sales. That is why a shop with more agreements is worth more: the same revenue produces more profit and more of it is predictable. Another page notes some owners who thought they ran at a 25 percent net margin found the real figure nearer 7 percent after spreading overhead across jobs. For more by trade, see my guide to home service profit margins.

A valuation calculator, by hand

An online calculator does one thing: profit times multiple. You can do it on paper. This is a made-up example.

1. Net profit last year: $150,000.
2. Add back the owner's pay: $90,000.
3. Add back personal costs run through the business, such as a family phone plan: $15,000.
4. Add back one-time costs, such as a lawsuit settlement: $10,000.
5. SDE: $265,000.
6. Multiply by 2.75, the HVAC average above: about $729,000.

Now see what clean records are worth. If a buyer trusts your numbers and your maintenance base, and you earn a half turn more (3.25x), the price is about $861,000. That is about $132,500 more for the same shop. Buyers reject add-backs they cannot prove, so every item above needs a receipt or a record.

The job and margin data buyers ask to see

• Three years of profit and loss statements and tax returns.
• Revenue split: service, replacement, new construction, maintenance agreements.
• Number of active maintenance agreements, renewal rate, and price per agreement.
• Profit per job type, so they can see which work earns the margin.
• Top 10 customers by revenue.
• Technician count, pay, and revenue per technician.
• Lead sources and how many calls turn into booked jobs.

If your jobs live in notebooks and three tools, you cannot hand this over. Field service software that holds jobs, invoices and agreements in one place solves it. My guides to field service management software, HVAC CRM and plumbing software cover your options, and the KPI dashboard guide shows which numbers to watch. The same logic applies to a cleaning business: buyers pay for records and repeat customers, as I explain in my cleaning business software guide.

For a larger sale, advisors often suggest a quality of earnings review, where an accountant tests your add-backs before buyers do. One advisor page puts that cost at $15,000 to $75,000 or more, as of November 2026.

How I'd approach this

I would start two years before a sale. First, pull profit by job type for the last 12 months, even if it takes a weekend with a spreadsheet. Second, count your maintenance agreements and set a goal to grow them. Third, write down what only you do, then hand one piece to someone else every quarter.

Keep the records clean from now on. Tag every job with a type, a technician and the actual cost. When a buyer asks what a replacement job earns, you want to answer from the data, not from memory. If your tools do not give you that view, a small custom reporting tool built on your own job data is often cheaper than switching systems. Valuation advice from brokers and accountants is worth paying for before a real sale, since the stakes are large and local deals differ.