Electrical contractors with commercial contracts and licensed journeymen sell for 5-7x EBITDA. Most residential-only shops? 2-4x.
Every electrical company is valued by the same equation: Adjusted EBITDA x Industry Multiple. EBITDA is your profit after expenses, before taxes and depreciation. The multiple depends on your size, contracts, and how dependent the business is on you.
Electrical companies are historically undervalued compared to plumbing and HVAC. The reason? Lower recurring revenue. Most electrical work is project-based - new construction, remodels, panel upgrades. Without recurring maintenance contracts, buyers see less predictable cash flow.
Private equity is buying electrical companies at an accelerating pace. If you're considering selling in the next 3-5 years, the window is open right now.
The electrical trade is roughly 5 years behind plumbing and HVAC in the private equity consolidation cycle. That's actually good news if you own an electrical company right now. Here's what's driving the wave:
These aren't theories. They're the exact levers that separate a 3x exit from a 6x exit in the electrical trade.
Residential remodel work is one-and-done. Buyers want predictable revenue. Shifting even 20-30% of your work to commercial maintenance contracts - property management companies, retail chains, restaurant groups, office buildings - can add 0.5-1.0x to your multiple. That's real money on a $500K EBITDA business: $250K-$500K more in your pocket at close.
This is the #1 value killer in electrical businesses that doesn't exist in most other trades. If you're the only master electrician, the buyer can't operate without you. The fix: hire or develop at least one additional master electrician. The cost of their salary is tiny compared to the 0.75-1.25x multiple increase it creates. On a $1M EBITDA business, that's $750K-$1.25M in additional exit value.
Buyers are paying premium multiples for electrical companies with EV charging, solar installation, and smart building capabilities. These aren't future bets - they're current revenue drivers with long-term tailwinds. Adding EV or solar capability positions your company in the fastest-growing segments of the electrical trade. Even a small existing portfolio signals growth potential worth +0.5x or more to a strategic buyer.
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Frequently Asked Questions
How much is my electrical business worth?
Electrical business valuations are based on Adjusted EBITDA multiplied by an industry-specific multiple. Electrical companies typically sell for 1.5-8x EBITDA depending on revenue size, recurring revenue, owner dependency, and customer concentration. Use our free calculator for a personalized estimate.
What EBITDA multiple do electrical companies sell for?
Electrical companies sell for 1.5-8x EBITDA. The exact multiple depends on recurring revenue percentage, commercial vs residential mix, licensed staff, and owner independence. Higher recurring revenue and reduced owner dependency generally command higher multiples.
How do I increase my electrical business valuation before selling?
Three key steps: (1) Build recurring revenue through service agreements, (2) Reduce owner dependency by hiring and documenting, (3) Diversify your customer base. These changes can add 1-2x to your multiple, often translating to $500K+ in additional exit value. Read our free training for the full playbook.
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