Electrical Contractor Valuation
29 valuation methods · 43 industries · Results in under 10 minutes
In short
An electrical contractor is usually valued on seller's discretionary earnings: EBITDA plus the owner's pay. VA values service agreements at a higher multiple than project work, and lowers the multiple as new-construction projects take a larger share of revenue.
Who this is for
Owners of residential, commercial and industrial electrical contracting companies preparing to sell, bring in a partner or plan succession, and buyers who need the service and maintenance book separated from fit-out and new-construction projects.
How is an electrical contracting company valued?
VA values an owner-run electrical contractor on seller's discretionary earnings: EBITDA plus the owner's pay, because a buyer replaces the owner. Service and maintenance agreements are valued as their own layer, at a higher multiple than one-off work, and that multiple rises with the share of customers who renew. Project, fit-out and new-construction work is valued at a lower multiple that rises with the company's size and falls as work for new construction takes a larger share. Comparable companies, precedent transactions and a discounted cash flow check the result, and an asset floor keeps it above what the company's own assets would recover. This tool is informational only. Output is driven by your inputs and does not constitute a formal appraisal or certified valuation.
What drives the value of an electrical contracting company?
- Service and maintenance agreements with facilities, property managers and plants
- The share of new-construction and fit-out work, which follows the building cycle
- Licensed electrician headcount, apprenticeship pipeline and retention
- Relationships with general contractors and property managers that bring repeat work
- Safety record and bonding capacity for larger projects
- How much estimating and project management the owner still does personally
What lowers the value of an electrical contracting company?
- A large share of new-construction projects, which follow the building cycle
- Revenue tied to a few general contractors
- Too few licensed electricians, or dependence on the owner's license
- Little service and maintenance work to carry the business between projects
How much is an electrical contracting company worth? A worked example
Service work against new-construction projects
An electrical contracting company with $5 M of revenue, $600 K of EBITDA and $180 K of owner pay has $780 K of seller's discretionary earnings. Service agreements bring in 10% of revenue, with 80% of those customers renewing, and 50% of revenue is new-construction projects. The trades model values the agreement share of earnings at 4.6× and the rest at 2.5×, about $2.11 M before debt. If new-construction projects were 15% of revenue, the rest would be valued at 2.85× and the total would come to about $2.36 M.
Illustrative figures from the industry model alone. A full report blends it with a discounted cash flow, comparable companies and precedent transactions.
Value your electrical contracting company in under 10 minutes
- 1.Upload your financial statements, or type the figures in.
- 2.Confirm the add-backs and the industry details the model asks for.
- 3.Get a valuation range, the methods behind it and a PDF memorandum.
Which numbers matter most?
Seller's discretionary earnings
EBITDA plus the owner's own pay and perks. VA uses the pay you enter; for a small owner-run company with no figure entered, it estimates a working owner's salary.
Recurring contract revenue
Revenue from service and maintenance agreements. VA values it as its own layer, separate from projects.
Customer retention
The share of contract customers who renew each year. The multiple on the recurring layer rises with it.
New-construction share
The part of revenue from work on new buildings. It follows the building cycle, so VA lowers the multiple on job work as it grows.
Licensed electricians
The number of licensed electricians. It limits how much work the company can take on and is much of what a buyer is acquiring.
What do you need to value an electrical contracting company?
- Profit and loss statements and balance sheets, ideally for the last three years
- Figures for the current year to date
- A list of add-backs: the owner's pay and perks, and any one-off costs
- Loan and lease balances
- A list of service and maintenance agreements
- Revenue split between service work and new-construction projects
- The owner's own pay
Example scenarios
Service work against fit-outs
Two electrical contractors earn the same. One earns much of it from maintenance agreements with the same facilities every year; the other from office fit-outs won by bid. VA values the first higher, because agreement revenue is priced as a recurring layer and project work tied to construction receives a lower multiple.
The owner who estimates every job
When the owner prices every bid personally, a buyer has to replace that skill as well as the owner's time. Seller's discretionary earnings add back the owner's pay, but a buyer will look for an estimator or project manager in place before paying for those earnings in full.
Further reading
How to Value an HVAC Business in 2026: SDE and EBITDA Multiples
HVAC businesses sell for about 2x to 3.3x SDE for small shops and 5x to 9x EBITDA for larger firms. See 2026 multiples by size and what drives the number.
Is a Business Worth 3 Times Profit? When It Is 2x, When It Is 5x, and Which Profit Counts
Is a business worth 3 times profit? Often, if the profit is SDE. When 2x or 5x applies instead, which profit counts, and what diligence does to the price.
How Much Is a Business Worth With $500,000 in Sales? The Revenue Ladder From $100K to $3 Million
Revenue does not set a price, earnings do. See what businesses at $100K, $200K, $300K, $500K, $1M, $2M and $3M in sales are worth at 10%, 20% and 30% margins.
Frequently asked questions
Is my company valued on SDE or on EBITDA?
The leading method uses seller's discretionary earnings, EBITDA plus the owner's pay, because most buyers of owner-run service companies replace the owner. Comparable companies and precedent transactions, which work on EBITDA, sit alongside it as checks.
How are large projects treated?
The model does not track individual projects. It values job work at a lower multiple than agreement revenue and lowers it further as new-construction work takes a larger share, so a company living on a few large projects comes out lower than a service-led peer with the same earnings.
Does my backlog raise the value?
The model values earnings and recurring revenue; signed backlog does not change the number today. A buyer will still ask for it, so keep it current.
Is this a certified appraisal?
No. This is an informational estimate. A bank loan, a partner buyout or an estate matter may require a certified business appraisal, which this does not replace.
Does my project backlog add to the value?
The trades model does not value backlog as its own layer. It shows how much work is secured ahead, which buyers read alongside the earnings.
Are low-voltage and solar installs valued differently?
They are valued like other project work unless they come with service agreements customers renew, which the model values at the higher agreement multiple.
Terms used on this page
- Seller's discretionary earnings (SDE)
- EBITDA plus the owner's own pay and perks. It shows what the business earns for one owner who works in it, and it is the figure most buyers of small owner-run businesses price.
- Add-backs
- Costs added back to reported earnings because a new owner would not bear them: personal expenses run through the business, one-off costs, or owner pay above what the role would cost to fill.
- Recurring revenue
- Revenue that repeats without a new sale, such as maintenance agreements, service plans or contracts customers renew.
- Renewal rate
- The share of customers on agreements or plans who renew each year.
- Valuation multiple
- The number earnings are multiplied by to reach a value. It rises with how durable the earnings are and how easily a new owner can keep them.
As featured in
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Last reviewed September 25, 2026 against VA's valuation models.