Plumbing Business Valuation Guide: Multiples and Methods (2026)
Most plumbing companies sell for 2.0 to 4.0 times their annual profit (SDE). Where yours lands inside that range comes down to four things: your service-agreement base, your licensed-plumber bench, your call mix, and how much of your revenue depends on new construction. Here is how buyers actually run the math, with a full worked example in real dollars.
2026 Plumbing Valuation Snapshot
2.0x - 4.0x
Profit Multiple (SDE)
4.0x - 6.0x
EBITDA, $1,000,000+ Earnings
6-9 mo
Typical Time to Close
Strong
Buyer Demand
How a Plumbing Company Valuation Works
Buyers value plumbing companies on earnings, not revenue. A $3,000,000 revenue shop with thin margins is worth less than a $1,800,000 shop that drops $500,000 to the bottom line.
The core formula is simple: your adjusted profit (SDE or EBITDA) times a market multiple. Everything else in this guide is about getting both numbers right.
Recurring revenue moves the multiple. A base of active service agreements and maintenance memberships is the single strongest signal that revenue will survive an ownership change.
Licensing is the transferability test. If you are the only master plumber and the license of record, buyers see a business that stops working the day you leave.
Revenue mix matters. Service and repair work carries higher margins and higher multiples than new-construction contracts tied to a few general contractors.
SDE or EBITDA: Which Number Applies to You?
The first question in how to value a plumbing company is which earnings number to use. Get this wrong and every calculation after it is off by six figures.
SDE (Seller’s Discretionary Earnings)
Net income plus your salary, payroll taxes on that salary, benefits, personal expenses run through the business, interest, depreciation, and true one-time costs. SDE assumes the buyer replaces you as a working owner-operator. It is the standard for companies with earnings under roughly $700,000 to $1,000,000.
EBITDA
Earnings before interest, taxes, depreciation, and amortization, after subtracting a full market salary for a general manager. EBITDA assumes the business runs without the buyer swinging a wrench. Private equity buyers and consolidators price on EBITDA, and they typically pay higher multiples for it.
The same company can look very different under each lens. A shop with $600,000 in SDE where the owner runs dispatch, sells the big jobs, and holds the license might only show $420,000 in EBITDA after a $180,000 GM salary is subtracted. Buyers will use whichever framing matches how the business actually runs today, not how you hope it runs.
For the full breakdown of both methods, read our guide on SDE vs EBITDA. The rest of this article uses SDE, since that is how most plumbing companies under $10,000,000 in revenue are priced.
Plumbing Company Valuation Multiples in 2026
These are the ranges most plumbing companies typically sell in, based on widely published market data. Size and owner-dependence set the tier; the quality factors below decide where you land inside it.
Under $250,000 SDE
Typically 1.8x - 2.5x SDE. The owner is the lead plumber, top salesperson, and license holder. Buyers are mostly individual owner-operators using SBA loans, and they price in the risk that customers followed the owner, not the company.
$250,000 - $700,000 SDE
Typically 2.3x - 3.2x SDE. Multiple trucks, licensed employees doing most of the field work, dispatch software in place. This is where the majority of sellable plumbing companies sit, and where quality factors swing the price the most.
$700,000 - $1,500,000 SDE
Typically 2.8x - 4.0x SDE. A service manager or GM runs daily operations, the owner works on the business rather than in it, and there is a deep licensed bench. Strategic buyers and search funds compete here.
$1,000,000+ EBITDA
Typically 4.0x - 6.0x EBITDA. Private equity groups building home-services platforms pay these multiples for scale, management depth, and heavy service-agreement revenue. Deals often include rollover equity or earnouts.
What Pushes You to the Top of the Range
- Service-agreement base, Hundreds of active maintenance plans, memberships, and inspection contracts (water heater service, backflow testing, commercial preventive maintenance). Recurring revenue of 15 to 25 percent of sales is a genuine multiple-mover because it transfers cleanly to a new owner.
- Licensed-plumber bench, Several licensed journeymen plus at least one master plumber besides you who can qualify the license. If the license of record survives your exit, the biggest transfer risk in the deal disappears.
- Healthy emergency and demand-call mix, Emergency and same-day service work carries the highest average tickets and margins. Buyers want a strong flow of demand calls layered on top of scheduled agreement work, not a business that only eats when the phone rings.
- Low new-construction exposure, Service and repair at 70 percent or more of revenue reads as durable. Construction contracts are cyclical, slow-paying, and usually tied to a handful of general contractors.
- Diversified customers, No single GC, property manager, or commercial account above 10 to 15 percent of revenue. Concentration is one of the first things a lender flags.
- Clean systems and records, Flat-rate price book, dispatch software with job-level history, GPS-tracked fleet, and three years of tax returns that match the P&L.
What Drags You to the Bottom of the Range
- You are the master plumber of record, the top producer, and the person every big customer calls
- New construction over 40 to 50 percent of revenue, especially with one or two GCs dominating
- No service agreements: every dollar starts from zero on January 1
- An aging fleet and equipment list that means the buyer writes big checks in year one
- Cash jobs and personal expenses tangled through the books, so earnings cannot be proven
- Declining revenue or shrinking gross margins over the trailing 24 months
- High technician turnover in a market where licensed plumbers are hard to hire
Want your number instead of a range?
BridgeBook’s free calculator factors in your revenue mix, recurring agreements, staffing, and owner involvement. About 5 minutes, fully confidential.
A Worked Example, Dollar by Dollar
Meet a fictional but realistic company: a residential and light-commercial plumbing shop with six vans, eight field employees, and a healthy service department. Here is exactly how a buyer would price it.
Step 1: Build the SDE
Step 2: Apply the Multiple
Multiples shown are typical published market ranges for plumbing companies of this size and profile, not BridgeBook proprietary data.
Why 2.8x for the midpoint? This shop has two licensed journeymen besides the owner, about 480 active service agreements producing 22 percent of revenue, and new construction at only 15 percent of sales. Those quality factors put it solidly above the 2.5x floor for its size tier.
Now flip one variable. If the owner were the only master plumber and personally ran the biggest commercial accounts, a buyer would likely price closer to 2.3x, which is $1,023,500. Same trucks, same revenue, and roughly $222,500 less at closing. That is the entire argument for fixing owner-dependence before you sell, not after a buyer notices it.
What the price typically includes: the vans, jetters, camera systems, and shop equipment needed to operate, delivered free of loans at closing. Parts inventory is usually added on top at cost, and accounts receivable typically stay with the seller in an asset sale of this size. If the fleet carries $140,000 in loans, that payoff comes out of your proceeds, so keep the headline price and your net number separate in your head.
Adjustments and Add-Backs: Where Valuations Are Won and Lost
At a 2.8x multiple, every $10,000 of documented add-backs is worth $28,000 at closing. The key word is documented: an add-back without a paper trail is just an argument.
Add-Backs Buyers Routinely Accept
- Your W-2 salary, the payroll taxes on it, and your health, life, and disability premiums
- Personal vehicles, fuel, and insurance for family cars run through the company
- True one-time costs: a lawsuit settlement, storm damage repair, a one-off equipment rebuild
- Interest and depreciation (standard in SDE; depreciation is often offset by real capex needs, so expect discussion)
- Discretionary spending with receipts: personal travel, season tickets, charitable gifts made for personal reasons
- Salaries of family members on payroll who do not actually work in the business
Adjustments That Cut Against You
- Unpaid family labor: if your spouse runs the office for free, buyers subtract a market salary to replace them
- Below-market rent: if you own the building and charge the company $2,000 a month when market is $5,500, earnings get adjusted down by the difference
- Underpaid key employees: a service manager at $55,000 who would cost $85,000 to replace triggers a negative adjustment
- Deferred fleet and equipment spending: skipping replacements for two years inflates earnings, and buyers normalize for it
- Warranty and callback backlog that the new owner will have to service at their cost
A note on honesty: some brokers inflate add-backs to win the listing, then watch the deal collapse in due diligence. BridgeBook takes the opposite approach. The valuation you get is one a buyer and an SBA lender can actually underwrite, even when that number is lower than what you hoped to hear. A defensible number closes; an inflated one just wastes a year.
How Buyers Verify Your Numbers
Once you accept a letter of intent, the buyer and their lender re-derive your valuation from source documents. Knowing what they will pull lets you fix problems now instead of renegotiating later.
- Three years of business tax returns, tied line by line to your P&L: differences need explanations, not shrugs
- Monthly bank statements matched against reported deposits: unreported cash jobs cannot be counted, so they add zero to your price
- Job-level reports from your field software (ServiceTitan, Housecall Pro, Jobber): average ticket, gross margin by job type, callback rates
- The service-agreement list with start dates, renewal dates, pricing, and churn over 24 months
- Payroll records plus license verification for every plumber against the state board
- Workers compensation loss runs and OSHA history: a bad claims record raises the buyer’s insurance costs and lowers their offer
- Fleet titles, loan payoffs, and maintenance records for every van and piece of major equipment
- Accounts receivable aging, warranty reserves, and any open permits or unfinished contract work
Confidentiality holds through all of this. On BridgeBook’s NDA-gated marketplace, buyers sign a nondisclosure agreement before they ever see your company name, and your employees, customers, and competitors stay in the dark until you choose otherwise.
How to Raise Your Multiple Before You Sell
1. Get Off the Truck
Spend the 12 to 24 months before listing moving yourself out of production. Promote or hire a service manager, hand your biggest accounts to a lead technician, and document the handoff. Every hour of field work you shed converts owner-dependence discount into multiple.
2. Build the Service-Agreement Base
Launch or grow a membership program: annual water heater service, drain maintenance, backflow testing, commercial preventive maintenance contracts. Getting recurring revenue from 5 percent of sales to 20 percent can move a company from the bottom of its multiple tier to the top.
3. Deepen the Licensed Bench
Pay for a second employee to sit for the master license, and keep journeyman licenses current across the crew. A buyer who can qualify the license without you removes the scariest contingency in a plumbing deal, and pays for that certainty.
4. Rebalance Away From New Construction
If construction is over 40 percent of revenue, shift marketing and capacity toward service and repair. You do not have to abandon builder relationships, just get demand-call and agreement revenue growing faster so the mix improves each quarter you hold the business.
5. Clean the Books
Stop running personal expenses through the company at least two full tax years before selling, end cash-job leakage, and make your P&L tie to your returns. Clean books at a lower reported profit often price higher than messy books at a bigger claimed profit, because buyers can finance what they can verify.
6. Systematize Pricing and Dispatch
A flat-rate price book, dispatch software with full job history, and GPS on the fleet turn tribal knowledge into transferable assets. They also produce the exact reports buyers ask for in due diligence, which shortens the deal and protects the price.
For the full pre-sale playbook, see our plumbing business preparation guide, and when you are ready for the process itself, the step-by-step guide to selling your plumbing business.
Frequently Asked Questions
What is my plumbing company worth?
Most plumbing companies sell for 2.0 to 4.0 times Seller’s Discretionary Earnings (SDE). A company with $445,000 in SDE typically lands somewhere between $1,112,500 and $1,424,000 depending on its service-agreement base, licensed staff, and revenue mix. Larger companies with $1,000,000 or more in EBITDA are usually valued on EBITDA instead, typically at 4.0x to 6.0x.
What multiples do plumbing companies sell for?
Typical plumbing company valuation multiples run in tiers. Shops under $250,000 SDE where the owner is on the truck usually sell for 1.8x to 2.5x SDE. Companies with $250,000 to $700,000 SDE and a real crew typically get 2.3x to 3.2x. Manager-run companies with $700,000 or more in SDE can reach 2.8x to 4.0x. Companies with $1,000,000+ EBITDA attract private equity consolidators at 4.0x to 6.0x EBITDA.
How do I value a plumbing company myself?
Start with your last full-year tax return and a trailing-12-month profit and loss statement. Take net income, then add back your salary, payroll taxes on that salary, health insurance, personal vehicles, one-time expenses, and interest. That total is your SDE. Multiply it by a market multiple, typically 2.0x to 4.0x for plumbing, based on your size, service-agreement base, licensed bench, and construction exposure. BridgeBook’s free calculator automates this in about 5 minutes.
Are my trucks and equipment included in the valuation?
Typically yes. In most plumbing company sales, the vans, jetters, cameras, and shop equipment needed to run the business are included in the multiple-based price, delivered free of loans at closing. Parts inventory is often added on top at cost. If your fleet carries heavy financing, the payoff comes out of your proceeds, so the headline price and your take-home number can differ.
Does new construction work lower my plumbing company valuation?
Usually, yes. New-construction revenue is cyclical, lower margin, and often concentrated in a few general contractor relationships, so buyers discount it. Service, repair, and maintenance-agreement revenue commands the higher multiples. Companies with new construction above roughly 40 to 50 percent of revenue typically price toward the bottom of the range.
What’s Your Plumbing Company Worth?
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