What Is Seller Discretionary Earnings (SDE) and Why It Matters
SDE is the single most important number in a home service business sale. Most owners get it wrong. Here's how to calculate it correctly.
Read Article →What are plumbing businesses selling for in 2025? A data-driven breakdown of plumbing company valuations by size, geography, and revenue quality.
Jason Taken
HedgeStone Business Advisors
Plumbing businesses are a staple of home services M&A. Strong demand from homeowners, recession resilience, and increasing PE interest have kept plumbing multiples solid — with premium businesses reaching the 4x+ SDE range.
Small plumbing businesses ($500K–$1.5M revenue): sell for $500K–$1.5M, typically 2.5x–3.5x SDE. Mid-market plumbing ($2M–$5M revenue): $1.5M–$4M, 3.0x–4.0x SDE. Larger plumbing platforms ($5M+ revenue): $4M–$15M+, 4.0x–5.5x SDE or 5x–8x EBITDA for PE deals.
The highest multiples in plumbing go to: businesses with significant maintenance plan revenue (water heater agreements, annual inspections, drain maintenance programs), businesses with a dedicated estimator/sales function (not just the owner selling), businesses with a fleet and licensed tech team that can work independently, and businesses in high-growth metro markets with documented revenue growth.
Residential plumbing businesses typically command higher multiples than commercial. Residential has lower customer concentration (hundreds of homeowners vs. a handful of commercial accounts), higher margins, and more predictable service patterns. Commercial plumbing with recurring service agreements (facility maintenance contracts) can also command premium multiples, but pure construction-focused commercial plumbing is harder to value on recurring metrics.
SDE is the single most important number in a home service business sale. Most owners get it wrong. Here's how to calculate it correctly.
Read Article →Every $1 of recurring maintenance revenue is worth $1.50–$2.00 more than project revenue at sale. Here's the math — and how to convert your customers.
Read Article →SDE multiples, EBITDA multiples, revenue multiples — which method is right for your business? A comprehensive guide to home service business valuation.
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