What trades businesses actually sell for

The math buyers actually use

Nearly every small-business price starts with the same equation: a normalized earnings number times a market multiple. The multiplication is the easy part. The arguments are about which earnings number is real, whether the buyer measures it as SDE or EBITDA, and what multiple fits your trade, your size, and your risk. Understand those three things and most of the confusion around “what’s my business worth” goes away.

SDE, in plain English

SDE — seller’s discretionary earnings — is the cash flow available to one working owner before debt payments, taxes, and reinvestment. It takes the profit on your books and adds back your own salary plus legitimate owner-specific expenses. If you run the trucks, quote the jobs, and sign the checks, SDE describes what a buyer would take home doing your job. That is why it is the standard measure for smaller owner-operated shops: the buyer is usually an individual who plans to step into your seat, often with an SBA loan, and what they are really buying is your job plus your customer base.

EBITDA, and when buyers switch

EBITDA — earnings before interest, taxes, depreciation, and amortization — is the measure buyers use when the business has, or should have, a management team. Adjusted EBITDA strips out one-time and owner-specific items but subtracts a market salary for someone to replace your operating role. That makes the earnings number smaller than SDE, yet EBITDA businesses usually sell for higher multiples, because the earnings do not depend on one person showing up.

There is no hard cutoff, but the market tends to shift by size. Below roughly $300K in earnings, deals are SDE deals with individual and local buyers. From $300K to $1M it is mixed — SBA buyers, searchers, and small strategics. Above $1M in earnings, EBITDA becomes the common basis, and at $3M+ EBITDA you are in institutional territory. Moving up that ladder is not about revenue alone. It is about whether the company runs without you.

The ranges, trade by trade

These are broker and advisor guide ranges combined with marketplace data, directional as of June 2026. They are not a promise, an appraisal, or an offer — closed-deal data for very small private companies is sparse, and your market, your books, and your buyer change the answer.

• HVAC. Small owner-operated: 2.5x–4.5x SDE. Professionalized add-ons: 5x–8x EBITDA.
• Plumbing. Small: 2x–4x SDE. Established multi-tech: 3x–6x EBITDA. Commercial and recurring-heavy: 5x–8x EBITDA.
• Electrical. Small: 2x–3.5x SDE. Larger service and commercial firms: 5x–8x EBITDA.
• Landscaping and lawn care. Small: 2x–4x SDE. Professionalized commercial maintenance: 3.5x–7x EBITDA.
• Cleaning and janitorial. Small: 2x–4x SDE. Contract-heavy B2B recurring: 4x–7x EBITDA.
• Roofing. Small: 2x–4.5x SDE. Larger production-managed firms: 4x–9x EBITDA.
• Auto repair. Small: 1.5x–3x SDE. Multi-bay or multi-location: 3x–5x EBITDA.
• Restoration. Small: 2.5x–4x SDE. Scalable mitigation and reconstruction platforms: 5x–11x EBITDA.
• Pest control. Small route operators: 3x–5x SDE. Platform-quality recurring assets: 6x–10x EBITDA.
• Pool service. Routes are often quoted at 8–12x monthly recurring revenue. Larger multi-route operators trade on earnings.

For scale: a plumbing company with $450K of supportable SDE that is owner-dependent and lightly systematized might see a 2.5x–3.2x guide range — roughly $1.1M–$1.4M — while the same revenue base, professionalized over 18 months to $420K of manager-supported EBITDA, might see 4x–5x, or roughly $1.7M–$2.1M.

What moves you from the bottom of the range to the top

The spread inside each range is not random. Buyers are pricing risk, and a handful of factors do most of the work. An owner working 50+ hours a week pushes the multiple down — the buyer prices in replacing your job. An owner under 20 hours with a real general manager pushes it up. Twelve-plus months of clean monthly books pushes it up; unreconciled books push it down or end the conversation. Recurring revenue above 30–50% where the trade supports it — maintenance agreements, pest routes, janitorial contracts — pushes it up. One customer over 20% of revenue pushes it down, and over 30–40% can kill the deal. Stable gross margins you can explain, and key employees who will stay, round out the list.

The arithmetic is why this matters. Take a shop with $400K SDE at 2.8x — about $1.12M. Improve earnings to $500K and the risk profile enough to support 3.8x, and the same business guides toward $1.9M. Only $100K of that came from earnings. The rest was the multiple, which is the buyer’s shorthand for how risky your earnings look.

The consolidator wave

Private-equity-backed platforms have been buying trades businesses heavily through 2024–2026 — names like Apex Service Partners, Sila Services, and Wrench Group in HVAC and plumbing, Yellowstone Landscape and BrightView in landscaping, Rentokil and Rollins in pest, Driven Brands in auto, BELFOR and BluSky in restoration. Their logic is consistent: essential services, fragmented local markets, and recurring revenue they can scale.

What platform buyers pay premiums for is specific. Maintenance agreements with documented renewal rates. Clean field-service-software data — calls, booked jobs, close rates, gross margin by line. Route density. Technicians and managers who stay after close. Low customer concentration. What they do not pay platform multiples for is a shop that is really one owner with helpers. The common misconception is “PE will pay platform multiples for my shop.” They won’t. Consolidators pay add-on multiples for add-on-shaped businesses, and the work of becoming add-on-shaped happens before the first buyer call.

How to read these numbers

A range without context is not useful. “$1.5M–$2.0M based on $500K of supportable SDE and an individual/SBA buyer” tells you something. “Your business is worth $2M” does not. Always ask which earnings basis, which buyer type, and which assumptions sit behind a number — and treat broker/advisor guide ranges as a starting point to validate with a broker, M&A advisor, or closed-deal data, not as a promise. XitWisely is AI-assisted and educational; nothing here is an appraisal or legal, tax, or financial advice.

If you want to know where your business likely sits today — earnings basis, probable buyer pool, and the specific factors holding your multiple down — the free readiness scan walks through it in a few minutes. No appraisal, no pressure. Just a clear picture of where you stand and what would move the number.