What an Electrical Contracting Business Is Really Worth (and What Moves the Number)

It tends to happen in January, the slow stretch when owners start wondering what the place would fetch. A buyer looking at the same shop runs very different math, and the gap is almost all about you.

The master license every permit gets pulled under is in your name. The commercial accounts still call your cell. So the company legally and practically stops the day you leave, and that's why it's worth less than you think to the person writing the check.

The real number

An electrical contracting business is worth a multiple of its seller's discretionary earnings, and for an owner-operator that multiple is low single digits. Electrical maps to the Service business-type bucket, where the SDE multiple runs about 2.4 to 3.2 times at $250K-$500K SDE and 2.9 to 3.9 times at $500K-$1M.

The all-industry median sits near 2.0 to 2.5 times SDE. That big multiple you heard is an EBITDA figure for a different kind of buyer.

Those ranges are SDE multiples drawn from a decade of closed transactions. It's the Main Street number a working owner actually closes at.

Run it on the $330K SDE from the top of this page. At the $250K-$500K band that's roughly $792K to $1.06M, nowhere near the $2M-plus the platform framing implied.

The broker number felt close because it's a real number for a real buyer, and this seller isn't that buyer's target. Believe it or not, a PE roll-up really does pay multiples that high, which is why the confusion hangs around.

Here is the full canon Service-bucket range by SDE band, the same table the diagnostic uses:

Those bands are the Service-bucket canon, calibrated across a decade of closed transactions. Electrical sits inside that bucket, and the band is the honest starting point for an electrical shop's number.

The median electrical business sells at 2.99x SDE, inside that band, with the published category range running 2.33x to 3.73x. Those come off BizBuySell's Electrical and Mechanical Contractor valuation-benchmark page, read on 2026-07-18.

That range reflects size, geography, margin, deal terms and buyer type. How much the shop needs you is a separate swing on top of it.

Keep this full electrical business valuation walkthrough handy, because the sections below show where your own number lands inside that band.

Most owners have never checked any of this. 86% of owners have no professional valuation or only a rough estimate, so most are anchored to the wrong number.

That big multiple belongs to someone else

The high multiple is real. It just describes a different world.

In platform world, a private-equity firm rolls up dozens of electrical companies into one entity, prices it on EBITDA, and pays up because it's buying scale, management depth, and a portfolio no single owner anchors.

In owner-operator world, a buyer or successor buys your one-to-five-crew business, prices it on SDE because your earnings include your own pay and add-backs, and pays a low-single-digit multiple because the business still leans on you.

EBITDA strips out the owner's pay and assumes a management layer's already in place. SDE adds your pay back in, because the buyer has to replace you. That one accounting difference is what splits the two numbers, so the same shop looks like a big multiple to a broker and a small one to the person writing the check.

There's a second reason, and it's the one that matters to you. The roll-up is buying a company that already runs without any one owner. You're selling one that still runs on you.

A platform pays up because that management risk is already solved across its portfolio. An owner-operator buyer pays down because it's the first problem they inherit after closing. So the SDE-versus-EBITDA gap reads straight off how much of the business still sits on the owner.

That independence discount sits behind every trade's number, and you can see what every trade is really worth for the cross-trade view. For the conversion line by line, the SDE-versus-EBITDA method shows exactly where the platform number and yours split apart.

Five decisions that move your number

Your trade and your revenue set the band. Decisions you control set where you land in it.

Each one below points to the deeper method. Start with whichever matches where you are.

• Decision 1, whose license the business runs on, is the single most expensive owner-dependence in electrical: the qualifying master license the company may legally hinge on. Making that arrangement survive your exit is what closes the discount, the work of selling an electrical business for more than the owner-dependence discount.
• Decision 2, whether the business runs without your license on site, is what a buyer pays the higher multiple for. The methods that get you off the job are in running an electrical business without your license on every site, and they produce a business that runs without you, built on the way you run your business like a system.
• Decision 3, the manager you hire around the master role, is how authority on the work stops being yours alone. That hire is covered in hiring an electrical business manager around the qualifier role.
• Decision 4, the clean SDE story a buyer can trust, means add-backs and books that hold up under scrutiny. The method for building that number is to value a small business the way a buyer will.
• Decision 5, the buyer's pre-bid read of the same numbers, is these same levers run in reverse, with the license arrangement as the first diligence flag. The buyer's side is the pre-bid analysis of an electrical deal.

The license decides most of it

One of those carries more of your number than the rest: the master license the business runs under. Whoever holds the commercial relationships sits right next to it.

Two things make it the priciest owner-dependence in the trade. The business may legally hinge on your qualifying license, and the comercial relationships that feed the work are personal to you. A buyer looks at both and sees risk they can't take over.

The license is the legal permission the company needs to operate, which is why transferring it is the first thing a buyer or successor has to solve. A business that can't pull permits the day after you leave isn't one a buyer can finance.

The recurring side of the book matters too, and the direction's clear. Commercial service contracts lift the recurring book and the multiple, while pure project and new-construction work is lumpier and harder to price.

A license arrangement that survives your exit, plus commercial relationships a second person holds, is worth more than the same revenue running through you alone. That's the difference between the low end of the band and the high end.

Think about the buyer's first question about your license. They aren't asking what work you can do. They're asking who is legally qualified to run this company once you're gone, and until you have an answer, strong revenue won't lift the multiple much.

How a lender reads electrical

A buyer usually borrows to close, so the lender's view of your trade quietly shapes what a buyer can pay. The broker page never shows you this, and it happens to work in electrical's favor.

Electrical maps to the Service bucket, and Service sits at the low-risk end of the SBA charge-off ordering. Professional Services and Service anchor the low end of realized SBA charge-offs, and Food Service and Retail anchor the high end.

A lower-risk trade is one a lender finances with less friction, so a buyer can back a stronger offer. The risk tier doesn't change your estimated value. It tells a buyer the financing's more likely to clear.

Finding your own number

The decisions are yours and they can be ranked, which means your real number is knowable well before a broker shows up. What you need to know is how much of this specific business still runs on you.

The seller-prep method for closing the discount, one decision at a time, is laid out in preparing your business to sell.

Keystone is built to measure where you stand before you start, and it's closed right now while the build finishes. The app sends every visitor to a waitlist. Join it at https://app.trykeystone.io.

When it opens, the diagnostic is 18 questions and about four minutes. It returns three scores on how much of the business still runs on you and a value range with the most likely figure locked, calibrated against 10 years of BizBuySell Insight Reports and 1.6M-plus SBA 7(a) loan records, so you'll know which decision is costing you the most.

FAQ

What multiple do electrical businesses sell for?

An owner-operated electrical business in the $500K-$2M range sells at a low-single-digit multiple of seller's discretionary earnings, roughly 2.4 to 3.2 times at $250K-$500K SDE and 2.9 to 3.9 times at $500K-$1M. The high multiple you may have seen quoted is an EBITDA multiple for platform roll-ups, not the owner-operator's number.

How do you value an electrical contracting company?

You apply an SDE multiple from the Service bucket to the business's seller's discretionary earnings, landing low or high in the band based on owner-independence, license transferability, and clean financials. SDE includes the owner's pay, which is why it differs from the EBITDA multiple brokers quote.

What makes an electrical business worth more?

A qualifying license arrangement that survives the owner's exit and commercial relationships a second person can hold, rather than a master license and a contract book that live only with the owner. Owner-light electrical businesses transact near 3.5x SDE and owner-dependent ones near 1.65x, a $1,110,000 spread on a $600,000-SDE business.

Can you sell an electrical business if the license is in the owner's name?

You can, but the license transfer is the first thing a buyer or successor has to solve, because the business may legally hinge on it. A business that keeps the qualifying license available after the owner leaves clears that risk, which is what lifts the multiple toward the higher end of the band.