How Much Is a Texas Trades Business Worth?

Pricing a business in this market is a method, not a mystery.

This page explains how buyers in the lower middle market actually arrive at a number — adjusted EBITDA, add-backs, and the factors that move the multiple. Trade-specific detail lives on each industry page, linked below.

Last reviewed: August 10, 2026

Revenue is not the number that matters

Owners tend to talk about revenue because it's the number they watch all year. Buyers in this market price on earnings — specifically, adjusted EBITDA: earnings before interest, taxes, depreciation, and amortization, restated to show what the business produces for a new owner rather than what the tax return was optimized to show. Two companies with the same revenue can have very different adjusted EBITDA, and the one with more of it is the more valuable company.

The restatement matters because most privately held companies are run to minimize taxable income. Owner compensation, family members on payroll, personal vehicles and insurance, the deer lease — all of it depresses the earnings a stranger would actually receive. Valuation starts by putting those earnings back on the table.

Add-backs: what buyers accept, what they reject

An add-back is an expense you argue doesn't continue under new ownership. Buyers generally accept the ones that are documented and genuinely non-recurring:

  • Owner salary and benefits above what a replacement manager would cost
  • Family members on payroll who don't work in the business
  • Personal vehicles, travel, insurance, and memberships run through the company
  • True one-time items — a lawsuit settled, a flood repair, a moving expense

They push back on the ones that are really just costs of doing business: "one-time" expenses that recur every year under a new name, deferred maintenance dressed up as savings, rent adjustments when you own the building and plan to raise it, and any add-back that exists in a spreadsheet but not in the general ledger. Every rejected add-back is felt at the multiple — a dollar of disallowed EBITDA costs several dollars of price.

What moves the multiple up and down

The multiple is not a reward for size alone — it's a price on risk. Buyers pay more per dollar of earnings when those earnings look durable without the seller: revenue that repeats under contract, a management layer that runs the day-to-day, customers spread wide enough that losing one doesn't change the year, and financial records clean enough to survive a quality of earnings review.

The same forces run in reverse. Earnings concentrated in one customer, one estimator, or one license holder get discounted, because the buyer is pricing the chance that what they bought walks out the door. That is why surveyed ranges are wide: the spread between the bottom and top of a published range is mostly a picture of these risk differences, not of negotiating skill.

The four factors that dominate

Customer concentration. When a single customer accounts for a large share of revenue, buyers discount the earnings or restructure the deal around the risk — more earnout, less cash. Diversified revenue reads as durable revenue.

Owner dependency. If the owner is the chief estimator, the license holder, and the relationship behind the top accounts, a buyer isn't purchasing a company — they're purchasing a job the seller is about to leave. Businesses that run without the owner present command the premium end of published ranges.

Recurring revenue. Service agreements and maintenance contracts are the most consistently cited driver of premium pricing in the trades, because they convert one-time project work into predictable demand a buyer can underwrite.

Backlog quality. Backlog only counts if it survives scrutiny: how the work was won, at what margin, and whether the contracts transfer. Negotiated backlog with healthy margins supports value; thin hard-bid backlog can actually work against it.

What ranges currently look like

The figures below are approximations drawn from published industry commentary and transaction surveys. They describe general market conditions, not any particular business. Different sources define their samples differently, measure different earnings bases, and cover different periods — so ranges reported elsewhere will not always agree with these. Treat them as rough orientation, not as a measurement.

  • HVAC: generally reported around 3x to 10x adjusted EBITDA across the lower middle market, with smaller owner-operated companies clustering near the bottom of that range and larger, service-agreement-heavy operations at the top (published industry commentary and advisory firm surveys, early-to-mid 2026).
  • Plumbing: commonly cited in the range of roughly 2.5x to 6.5x adjusted EBITDA, a discount commonly attributed to lower service-agreement density (published industry commentary and advisory firm surveys, early-to-mid 2026).
  • Electrical: reported at approximately 3x to 8x adjusted EBITDA, with commercial-weighted operators reported trading toward the upper end on data-center and infrastructure demand (published industry commentary and advisory firm surveys, early-to-mid 2026).
  • Metal fabrication: lower-middle-market fabrication platforms in the $3M–$10M revenue band generally reported around 5x to 7.5x adjusted EBITDA for the twelve months ending Q2 2026 (GF Data manufacturing reporting).
  • For scale at the small end: the median small business sold on BizBuySell in 2025 — across all industries, at a median price of $350,000 — traded at approximately 2.6x seller's discretionary earnings (BizBuySell Insight Report, 2025 year-end). Different measurement, different market segment; it's included to show how much pricing changes with size and earnings basis.

These are approximate and they move. Any figure on this page reflects what was being reported as of the review date above.

Note the earnings basis when comparing any published number: multiples of seller's discretionary earnings (SDE) run on a different scale than multiples of adjusted EBITDA, and headline figures frequently mix the two.

A worksheet, not a calculator

There is no valuation calculator on this site, deliberately. This page explains how buyers arrive at a number; it does not produce one. What follows is the input list a buyer's math starts from — the documents and figures owners generally assemble before a sale process begins.

  1. Three years of financial statements and tax returns
  2. Owner compensation and personal expenses run through the business
  3. One-time or non-recurring expenses, by year
  4. Revenue by customer for the trailing twelve months
  5. Revenue by type: service / recurring vs project / bid work
  6. Backlog, with how each job was won
  7. Equipment list with age and honest condition
  8. Which relationships and licenses sit with the owner personally

Assembling these is the work that happens before a sale process starts. If you have most of them and want to talk through what they show, that conversation is free.

Why the headline number is not what you keep

The multiple gets the attention; the mechanics decide the outcome. Three places the headline number changes after the handshake:

Valuation by trade

The factors above apply everywhere; what buyers weigh differs by trade. Each industry page has a valuation section specific to that business:

Common questions

How much is my business worth?

No webpage can answer that for a specific business. What can be said generally: buyers in the lower middle market price on adjusted EBITDA times a multiple, and the multiple is set by risk factors like customer concentration, owner dependency, recurring revenue, and backlog quality. Published survey ranges for the trades are wide — see the ranges section on this page — and where a given company lands inside them takes real financial detail to assess.

What multiple of EBITDA do trades businesses sell for?

Published survey data shows wide ranges, and every figure is approximate. HVAC companies were generally reported around 3x to 10x adjusted EBITDA, plumbing at roughly 2.5x to 6.5x, and electrical at approximately 3x to 8x (published industry commentary and advisory firm surveys, early-to-mid 2026). Lower-middle-market metal fabrication platforms were reported at roughly 5x to 7.5x for the twelve months ending Q2 2026 (GF Data manufacturing reporting). The spread inside each range reflects differences in recurring revenue, concentration, and owner dependence.

What is adjusted EBITDA?

Earnings before interest, taxes, depreciation, and amortization, restated to show what the business would produce for a new owner. Privately held companies are usually run to minimize taxable income, so valuation starts by adding back owner compensation above market, personal expenses run through the company, and true one-time items.

What add-backs do buyers accept?

Generally: owner salary above replacement cost, non-working family members on payroll, personal vehicles and expenses run through the business, and documented one-time items. Buyers push back on recurring costs labeled one-time, deferred maintenance, and anything that can't be traced in the books. Every disallowed add-back reduces the earnings the multiple is applied to.

Why do similar businesses sell at different multiples?

Because the multiple prices risk, not just profit. Two companies with identical earnings can be separated by customer concentration, whether revenue repeats under contract, whether the business runs without the owner, and whether the records survive a quality of earnings review. Those differences are most of the distance between the bottom and top of any published range.

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