Regional Plumbing Services Company
This acquisition opportunity centers around a mid-sized, full-service plumbing company operating across a large metropolitan area and several adjacent suburban zones. With a 23-year operating history, the business has positioned itself as a premium residential and light-commercial service provider, focusing on water heater replacement, sewer line repairs, leak detection, backflow testing, fixture upgrades, and 24/7 emergency services. It operates with 11 licensed plumbers, 5 apprentices, 4 fully equipped service vans, and a back-office team that includes dispatchers, CSRs, and a dedicated in-house bookkeeper.
Over the past fiscal year, the company reported $3.85 million in gross revenue with $725,000 in adjusted EBITDA. It enjoys a highly fragmented competitive environment, strong recurring lead flow via brand equity and online presence, and above-average job ticket sizes due to its focus on mid-to-high-income households willing to pay for quality and speed.
This type of plumbing business is ideal for SBA 7(a) financing due to its clean books, highly traceable revenue, and minimal reliance on cash payments. However, licensing, workforce stability, emergency responsiveness, and post-close customer retention must be precisely managed to ensure continuity, avoid SBA lender pushback, and protect the buyer from early disruption.
Proposed SBA 7(a) Deal Structure
The buyer should consider the following capital stack:
Purchase Price: $2.7 million (3.72x EBITDA)
SBA Loan: $2,025,000 (75%)
Buyer Equity Injection: $270,000 (10%)
Seller Financing (Subordinated): $405,000 (15%), amortized over 5 years with a 12-month interest-only period
Key performance-based protections should be baked into the seller note, including clawback triggers for:
Departure of more than 3 licensed plumbers within 90 days
Decline of monthly booked jobs by more than 20% within the first 120 days
Termination or loss of any licensing or trade designations linked to seller’s personal licensure (if applicable)
These provisions ensure continuity and allow buyers to de-risk execution of operations and hiring during the critical onboarding period.
Licensing and Qualifying Plumber Strategy
This company operates under a statewide Class A plumbing contractor’s license, with local business licenses per jurisdiction. The current license holder is the owner, who no longer performs fieldwork but remains actively listed on all regulatory documents.
If the buyer is not a licensed plumber, the deal must be structured through:
A temporary management services agreement (MSA) that retains the seller as the license holder until a successor can be named (typically 6–12 months)
An accelerated licensing plan for a current senior team member (e.g., lead plumber or operations manager) to become the qualifying party for licensing
Legal structuring of HoldCo/OpCo to reflect ownership by a non-licensed buyer with licensed operators managing daily work
Buyers should consult local trade licensing boards for specifics, as each state has distinct guidelines on license transferability and qualifying party requirements.
Technician Retention and Workforce Stability
The business’ 11 plumbers generate the majority of revenue, each handling an average of 5.8 jobs/day. The company maintains an apprentice pipeline (5 current) to promote internal career development, reducing the reliance on external hires. Turnover has been low historically (<12% annually), attributed to:
Competitive wages (average $38/hour plus overtime)
Fully equipped vans assigned to each tech
Performance-based bonuses and spiffs for upsells
Regular training and job safety reviews
To ensure post-close continuity, buyers should:
Execute signed retention agreements with the top 8 producers by revenue or job count
Immediately implement a transparent scorecard system that tracks revenue per job, rework rates, upsell conversion, and customer feedback
Offer an “early retention bonus” pool ($50,000–$75,000) disbursed in 6-month intervals based on performance
Schedule field check-ins or job site visits weekly during the first 60 days to boost visibility of new ownership
Revenue Breakdown and Margin Profile
Revenue is evenly split between:
Residential service calls (39%)
Water heater installs (20%)
Sewer repair/replacement (18%)
Fixture upgrades and bathroom remodel plumbing (11%)
Backflow testing, inspections, and commercial maintenance (12%)
The company offers 24/7 emergency dispatch, which accounts for 13% of overall jobs but drives disproportionately high ticket sizes ($800–$1,700 per visit). Emergency work is typically performed by an on-call tech who rotates weekly, with a premium labor rate and job incentive.
Gross margins average 58–62% across services, with higher margins on inspections, leak detection, and upsells (e.g., toilet and faucet upgrades). Water heater and sewer work are lower-margin due to parts and subcontractor trenching work, but provide important ticket-size and referral flow.
Post-close, the buyer should consider increasing average job size by:
Packaging services (e.g., water heater install + expansion tank + service contract)
Offering financing or same-as-cash options on $1,000+ jobs
Automating follow-up reminders for aging systems and annual inspections
Lead Flow and Sales Process
The company receives 80–100 inbound leads per week via:
Google Local Services Ads (LSA)
PPC campaigns for zip-specific services
Organic SEO (“best plumber near me” keywords rank top 3 in 8 major zip codes)
Home warranty referrals and repeat business
It uses Housecall Pro for dispatching, quoting, invoicing, and customer follow-up. All technicians are trained to present upgrade options and tiered quotes at each job, following a scripted value-based sales model. The closing ratio on qualified leads is over 72%, and more than 42% of jobs result in a second service within 6 months.
Marketing is minimal ($4,200/month), creating room for upside through:
Retargeting campaigns for one-time job customers
Lead capture via pop-up diagnostics or home health scorecards
Direct mail “plumbing club” offers for 2 annual inspections + discounts
Assets and Infrastructure
The business owns all 9 vans and leases 2 more. Average age of fleet is 5.2 years. Service vehicles include branded wraps, GPS trackers, rack-mounted inventory, and onboard iPads. Each van is loaded with:
Pipe threading tools
Augers and drain machines
Thermal imaging leak detectors
Water pressure test gauges
Replacement parts inventory
The company operates from a 4,000 sq ft commercial facility with 3 garage bays, a dispatch and training room, and secured storage yard. Lease is $5,700/month NNN with 18 months remaining and two 3-year options.
CapEx required in the first 18 months is estimated at $25,000–$40,000 for:
New van acquisition or replacements
Diagnostic tool upgrades
Expansion of CRM and booking software
Legal and Risk Review
Plumbing work carries licensing and liability exposure.
Diligence must include:
Review of all active trade licenses, apprenticeships, and bond certificates
Certificate of insurance: $2M general liability, $1M commercial auto, $1M workers comp
OSHA compliance, job safety logs, and injury history
Warranty and callback policy review (typical: 12-month parts and labor)
Employment manual and HR documentation, especially around timekeeping, travel pay, and overtime
There are no open lawsuits or warranty disputes above $5,000 in the last 36 months, per seller disclosure.
Working Capital and Post-Close Execution
Working capital needs include:
Payroll reserve for 3 weeks: ~$65,000
Inventory restocking: $30,000–$40,000 (parts, fittings, water heaters)
Marketing expansion: $10,000–$15,000
Equipment and fleet maintenance: $15,000 buffer
Post-close execution priorities:
Transition all technicians with structured onboarding meetings
Audit service profitability by job type and reprice as needed
Document all operational SOPs for dispatch, inventory control, job costing, and quoting
Launch internal licensing plan for a junior tech to qualify as a licensed lead
Begin reactivating lapsed commercial clients for backflow and inspection work
Ideal Buyer Profiles
Licensed plumbers seeking to acquire a team and client base
Trades consolidators expanding regionally
Blue-collar roll-up groups seeking route-dense, service-focused assets
Operators with HVAC or electrical experience who can cross-train dispatch and admin staff
Conclusion
This regional plumbing company represents a highly financeable, high-margin, and labor-dense opportunity with deep roots in the community and consistent demand for services that are not discretionary. Through proper structuring of licensing transition, technician retention, and recurring service programs, a buyer can create stable cash flow and grow equity rapidly.
With minimal customer concentration, stable inbound leads, and clean regulatory history, this deal checks all boxes for a qualified SBA buyer seeking a scalable service business with operational leverage, human capital infrastructure, and brand goodwill baked into the service area.
