🎯 The business: a plumbing, HVAC, landscaping, pest control, cleaning or pool service company whose owner is sixty-five and tired. You buy the customer list, the trucks, the phone number and the employees, usually with an SBA loan and the seller carrying a note. Owners retire every day; most have no buyer lined up.
The existing customers, who keep calling the same number. Service businesses with recurring contracts (pest, pool, lawn, cleaning, HVAC maintenance plans) are worth more than ones built on one-time calls. Prices run two to four times the seller’s discretionary earnings, so a company paying its owner $150,000 might sell for $300,000 to $600,000.
| Purchase price, small service company | $250,000 to $800,000 |
| Your cash (SBA 7(a) with 10 percent down, seller note for part) | $25,000 to $80,000 |
| Attorney, accountant, quality-of-earnings review | $8,000 to $20,000 |
| Working capital at closing | $20,000 to $40,000 |
| Cash to get in | ≈ $55,000 to $140,000 |
Before closing: three years of tax returns (not the seller’s spreadsheet), customer concentration, the age of the trucks, who holds the trade license, and whether the key employee will stay. Insist on a transition period with the seller on payroll. After closing: change nothing visible for ninety days. Meet every employee, ride along, call the top twenty customers, and only then fix what is broken.
A company with $1 million in revenue and $180,000 in owner earnings, bought for $500,000 with a $450,000 loan, costs about $60,000 a year in debt service. You keep roughly $120,000 before taxes while learning the trade from the people who already do it. Growth comes from the things the retiring owner stopped doing: a website that works, maintenance plans, a second crew.
Trade licenses often belong to a person, not the company, so you need a plan for who holds it after the seller leaves. Asset purchase versus stock purchase changes your liability for the past. Non-compete for the seller. Employee transfers, workers’ comp and payroll from day one. An SBA lender will walk you through much of it.
The customers were loyal to the seller personally and drift. The lead technician quits and takes the license. The books were optimistic. The trucks were older than they looked. The buyers who do well pay for the diligence, keep the seller around, and resist the urge to rename the company.