Key Takeaways

• Plumbing businesses are typically valued using EBITDA multiples, SDE (Seller’s Discretionary Earnings), asset-based valuation, and market comparison methods.
• Most small to mid-sized plumbing companies sell for 2.5× to 4.5× SDE, depending on profitability, customer base, contracts, assets, and reputation.
• Strong recurring revenue (maintenance contracts, service agreements) dramatically increases business value.
• Factors like brand reputation, equipment condition, employee quality, and digital presence (Google reviews, website, SEO) play a big role in valuation.
• Financial documentation, clean books, and reduced owner dependence make the business more attractive to buyers.

A plumbing business is typically valued using 2.5× to 4.5× Seller’s Discretionary Earnings (SDE) or by applying an EBITDA multiple for larger companies. Other valuation methods include asset-based valuation and market comparisons. Key factors affecting value include recurring revenue, customer base, profitability, brand reputation, equipment, and operational efficiency.

Introduction: How to Value a Plumbing Business (Without Getting Lost in Spreadsheets)

If you’ve ever tried to figure out what a plumbing business is worth, you know it can feel a bit like diagnosing a leak behind a wall — you know something important is there, but getting to it is another story.

I still remember helping a friend value his small plumbing company. He handed me a box full of receipts, a stack of invoices, and a coffee-stained ledger that looked like it had survived a flood. And yet, underneath all that chaos… the business was worth far more than he expected.

Valuing a plumbing business isn’t just about adding up tools and trucks. It’s about understanding profitability, reputation, recurring customer relationships, and the systems that keep the business running.

If you’re selling, buying, or just curious where your business stands — this guide breaks it down like a plumber explaining a clogged drain: simple, clear, and without the unnecessary jargon.

Let’s dive in.

How Plumbing Businesses Are Valued

Plumbing companies can be valued in several ways depending on size, revenue, and growth potential.

Here are the main methods:

Seller’s Discretionary Earnings (SDE) Method

This is the most common valuation method for small-to-mid-sized plumbing businesses.

What SDE Includes

• Net profit
• Owner’s salary
• Owner benefits
• Add-backs like vehicle expenses, travel, or one-time costs

Typical SDE Multiples for Plumbing Businesses (US Market)

Most sell for:

2.5× to 4.5× SDE

Higher multiples apply when the business has:

• Strong recurring revenue
• Great online reputation
• Clean financial records
• Low owner involvement
• Stable long-term staff

Lower multiples typically mean:

• Inconsistent revenue
• Poor documentation
• Outdated equipment
• Overreliance on the owner

EBITDA Valuation (For Larger Plumbing Companies)

EBITDA is used for businesses with:

• Multiple crews
• Management in place
• $1M+ in annual profit

Typical EBITDA Multiples

4× to 7× EBITDA

Companies with strong commercial contracts or government contracts may go higher.

Asset-Based Valuation

Useful when:

• The business isn’t profitable
• It’s equipment-heavy
• Selling primarily for assets

Assets Included

• Trucks
• Tools
• Office equipment
• Inventory
• Real estate (if applicable)

Formula:
Total Assets – Total Liabilities = Business Value

Market Comparison Approach

This method looks at similar plumbing businesses recently sold in the US.

What Buyers Compare

• Revenue
• Profit margins
• Online reputation
• Service area
• Equipment value
• Customer base size

A broker or valuation expert usually helps with this method.

Key Factors That Impact the Value of a Plumbing Business

A plumbing business isn’t just pipes and wrenches — it’s relationships, reliability, trust, and brand value.

Here’s what really drives valuation:

Recurring Revenue & Service Contracts

If you have:

• Commercial maintenance contracts
• Annual service agreements
• Shared accounts with builders or HOAs

Your business is worth significantly more.

Recurring revenue = stability = higher multiples.

Profitability & Financial Records

Buyers love clean books.

They’re not impressed by:

• Cash-only income
• Missing receipts
• Personal expenses mixed with business accounts

Clean financials = higher valuation and more offers.

Customer Base & Reputation

Buyers look closely at:

• Repeat customers
• Referrals
• Long-term commercial accounts
• Number of Google reviews
• Star rating on Google, Yelp, Angi, HomeAdvisor

A 4.8 rating with 200+ reviews?
You just doubled buyer interest.

Employee Skills & Turnover

A stable, experienced workforce increases value.

High turnover?
Buyers see risk and lower the price.

Owner Dependence

If the owner is the only licensed plumber, or the only one customers trust…

Value drops.

If the business runs smoothly without the owner?

Value skyrockets.

Brand Strength & Digital Presence

In 2025, plumbing businesses with strong online visibility hold more value.

Buyers assess:

• Website quality
• SEO ranking (do you show up for “plumber near me”?)
• Lead generation sources
• Social media
• CRM or booking systems

Digital presence = higher revenue potential.

Equipment & Vehicle Condition

Buyers examine:

• Truck fleet condition
• Age of equipment
• Inventory levels
• Software tools (dispatching, invoicing)

Newer, well-maintained equipment increases value.

How to Increase the Value of a Plumbing Business Before Selling

If you’re preparing to sell within 12–24 months, here’s how to boost valuation:

1. Improve Online Reputation

• Ask every happy customer for a review
• Aim for 100–300 reviews with 4.7+ rating

2. Add Recurring Revenue

Offer maintenance packages like:

• Annual water heater flush
• Commercial pipe inspections
• Drain maintenance plans

3. Systemize the Business

Buyers love processes.

Document:

• Pricing
• Scheduling
• Training
• Customer service scripts

4. Reduce Owner Dependence

Delegate:

• Calls
• Estimates
• Scheduling
• On-site work (train technicians)

5. Clean Up Financial Records

Organize:

• P&Ls
• Tax returns
• Contracts
• Invoices
• Equipment lists

6. Upgrade Equipment

A fresh fleet or organized inventory signals reliability.

7. Build a Strong Brand

• Modern website
• Clear logo
• Branded trucks
• Professional uniforms

Presentation matters — a lot.

How Much Is a Plumbing Business Worth? (Examples)

Business Type	Annual Revenue	SDE	Likely Value
Solo plumber	$180K	$90K	$225K–$300K
Small team (2–3 plumbers)	$450K	$180K	$450K–$720K
Mid-sized company	$1M	$300K	$900K–$1.2M
Large company	$3M	$750K EBITDA	$3M–$5M

These are typical US market ranges.

Frequently Asked Questions

Summary of the Blog

Valuing a plumbing business involves looking at earnings, assets, customer relationships, contracts, employee stability, online presence, and financial records. Most small and mid-sized plumbing businesses sell for 2.5× to 4.5× SDE, while larger companies use EBITDA multiples. Strengthening systems, improving reviews, securing recurring revenue, and reducing owner involvement can significantly increase business value.

With the right preparation, your plumbing business can command a strong price — because buyers aren’t just purchasing tools and trucks; they’re purchasing a reliable, well-built operation.