What is my electrical contractor worth? Electrical contractor valuation multiples in 2026

Buyers value an electrical contractor as a multiple of earnings, and which earnings they use depends on whether you run the company or a manager does. An owner-operated shop is priced on seller discretionary earnings (SDE): net profit plus one owner's full compensation plus documented add-backs. A company with a general manager, its own field supervision, and an owner who can step away is priced on EBITDA, which is SDE minus a market-rate salary for the manager who replaces you.

For the SDE market, the clearest public benchmark is BizBuySell's electrical and mechanical contractor category, built from businesses sold between 2021 and 2025. The middle half of those sales closed between 1.96x and 3.15x SDE, with a median of 2.56x. The category blends electrical with mechanical contractors, so read it as a trade-wide range, not an electrical-only figure. The same set shows median revenue of $1,724,323 and median SDE of $385,902 across 266 listings.

No public source publishes an EBITDA multiple specific to electrical contractors. Above the SDE market, buyers price off all-industry private deal data and off the strategy of the platform they are building, which is why the table in the next section keeps the two markets apart.

The buyer's lender tests the price before the buyer can pay it

When your buyer finances with an SBA 7(a) loan, the multiple you negotiate is only half the test. Under SBA SOP 50 10 8.1, in force since October 1, 2026, the lender must order an independent valuation from a Qualified Source whenever the business purchase price is above $350,000. Total acquisition debt, meaning the SBA loan plus any seller note not on full standby, cannot exceed that valuation. The same SOP requires at least 1.25x debt service coverage for an Initial Acquisition or Owner Buyout (1.15x when an existing contractor in the same industry group buys you as a Business Expansion), measured on historical results from the last fiscal year or a two-year average, and projections cannot be used to meet it.

A price that your trailing earnings cannot cover at 1.25x (or 1.15x for a Business Expansion buyer) will not close with SBA money, however full next year's backlog looks. Before you set an asking price, run your last two fiscal years through the SBA 7(a) loan calculator to see whether a financed buyer can carry the debt at that price.

An owner-operated electrical contractor sells for 1.96x to 3.15x SDE in the middle half of closed sales, and companies large enough to be priced on EBITDA sit in a different market measured with different data.

Read each row against its own measure. The SDE rows are quartiles of a five-year set of sold businesses. The EBITDA rows are a half-year average and a quarterly broker survey across all industries. They measure different earnings over different periods, so the gap between the SDE rows and the EBITDA rows is not a premium you earn by crossing a line.

Which buyers fit which row

The SDE rows describe companies with roughly $215,000 to $667,522 of SDE, the lower to upper quartile in the sold-business data. These companies fit SBA-financed individual buyers. Active buyers of EBITDA-priced electrical companies include PE sponsors forming electrical platforms (Truelink Capital with Prime Electric, Greenbelt Capital Partners with Bowe & Gant, Stonebridge Partners with CVM Electric) and multi-trade residential platforms such as Champions Group and Sila Services. The electrical buyer guide breaks down what each group pays.

The 10.6x, 12.6x and about 18.5x deals involve large or multi-trade businesses (Miller Electric and CEC with data center, healthcare and mission-critical exposure; Champions Group a residential multi-trade platform), and none of them represents a lower middle market electrical contractor.

Transferability raises the multiple: earnings that keep coming after you leave move you toward 3.15x SDE, and earnings tied to you personally move you toward 1.96x. Capstone Partners' sector coverage (Construction Services, August 2025, and Residential Services, October 2026) names the same drivers on both sides.

What moves you up

• Recurring service and maintenance agreements. Work converted from one-off calls into contracted, renewing revenue is easier for a buyer to underwrite.
• Institutionalized recruiting, training, and retention. The same coverage cites a Klein Tools projection of 107,000 to 224,000 unfilled electrician roles by 2030. A shop with an apprentice pipeline and long-tenured technicians is selling capacity a buyer cannot easily hire.
• Customer relationships held by the organization. Project managers and estimators who own the general contractor and property manager relationships, not the founder.
• Mission-critical end markets. Data center, healthcare, and similar exposure appears in the largest disclosed deals.

What moves you down

• Founder concentration. Customers and technicians loyal to you, not the company.
• Labor as the growth ceiling. If you are turning down work for lack of electricians, a buyer prices the constraint, not the demand.
• You are the license qualifier. If the contractor license rests on your personal license, the buyer needs a replacement qualifier or a commitment from you after closing. Rules differ by state licensing board, so confirm yours before you sign an LOI.

What buyers ask for in diligence

Expect requests for revenue by customer for three years, job-cost reports showing gross margin by job type, a work-in-progress schedule with over and under billings, a technician roster with license level and tenure, the service agreement list with renewal dates, and the name on every permit pulled. Undocumented add-backs get stripped from SDE, and each dollar stripped costs you the multiple times that dollar. Capital items are handled differently. If diligence finds trucks past their useful life or deferred equipment replacement, the buyer deducts that cost from the price dollar for dollar. It does not come off SDE before the multiple is applied, because it is not a recurring operating cost.

A qualifier who plans to leave at closing with no named replacement can stall a signed LOI, so line up the qualifier plan and your add-back documentation before the first buyer conversation.

A $400,000 SDE electrical contractor is worth between $784,000 and $1,260,000 on the 1.96x to 3.15x SDE range, with $1,024,000 at the 2.56x median. Here is the build for a company with $1,500,000 of revenue.

Step 1: rebuild SDE

The $50,000 line is the one buyers attack. Each add-back needs an invoice, a ledger entry, and a reason it will not recur under new ownership. See which add-backs a buyer will accept.

Step 2: apply SDE multiples to SDE

Every one of these prices is above $350,000, so a buyer's SBA lender must order an independent valuation from a Qualified Source, and the SBA loan plus any seller note not on full standby cannot exceed it. All three sit below the $3,000,000 business purchase price that triggers a required quality of earnings report under SOP 50 10 8.1. Where you land in the range depends on the drivers in the previous section and on whether your historical EBITDA covers the buyer's debt service at 1.25x (1.15x for a Business Expansion buyer).

The EBITDA market: a $6,000,000 revenue company

Take a company with $6,000,000 of revenue and $1,600,000 of EBITDA after paying a $150,000 general manager. SDE benchmarks do not apply here, because its earnings sit far above the $667,522 upper-quartile SDE in the sold-business data. No electrical-specific EBITDA multiple exists, so the only reference points are all-industry figures, labeled as such.

At that value the SBA's $5 million loan maximum cannot finance the deal on its own, so the buyer set shifts to PE platforms, PE sponsors forming electrical platforms, and strategic contractors, and the price becomes a negotiation over recurring revenue, technician depth, and end-market mix rather than a benchmark lookup.

An electrical contractor sale is paid as some mix of cash at closing, a seller note, an earnout, and, with PE buyers, rolled equity, and the headline price means little until you know the mix.

Cash at closing

Cash is funded by the buyer's equity and senior debt. With an SBA buyer on a complete change of ownership, the buyer must inject 10% of total project cost, and up to half of that may be a seller note on full standby, so 5% buyer cash plus a 5% standby note is a common structure.

Seller note

A standby note pays you nothing, principal or interest, for the life of the SBA loan. Interest may accrue and be paid after the SBA loan is repaid, so treat a standby note as long-dated deferred price. A seller note that pays currently counts as acquisition debt against the lender's valuation cap and as debt service in the coverage test; an interest-only note is amortized over no more than 10 years for that test. A larger paying note can push a buyer's coverage below the required minimum and shrink the price the lender will approve.

Earnout

An earnout pays part of the price only if the business hits a target after closing. It can bridge a gap when a buyer will not pay for unbilled backlog or a new service contract book. Negotiate the metric (gross profit is harder to manipulate than revenue), the measurement period, and who controls pricing and hiring during it, because an earnout you cannot influence is a discount with extra steps.

Rollover equity

PE sponsors building electrical platforms may ask you to keep a stake in the combined company. Rollover gives you a second payday if the platform sells later, and it ties part of your proceeds to decisions you no longer control.

Asset sale or stock sale

The form of the sale decides how your contractor license, customer contracts, and tax bill move. Buyers prefer asset purchases for the stepped-up basis; a stock sale can keep contracts and the license entity intact. Read asset sale vs stock sale before you accept a structure in an LOI.

If Munera runs a confidential buyer search for your company, the fee is a success fee paid at closing with no monthly retainer, and the $5,000 engagement deposit is credited against that fee.