Electrical & Mechanical Contractor Business Valuation Benchmarks

Electrical and mechanical contractors, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating electrical and mechanical contracting businesses relative to industry standards.

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Highlights of Electrical & Mechanical Contractor Businesses Sold on BizBuySell

Electrical and mechanical contracting businesses listed and sold on BizBuySell are comprised primarily of locally owned small businesses engaging in electrician service and electrical contracting, elevator and escalator installation, repair, and maintenance, and installation, repair, and maintenance of other electrical and mechanical systems. Most of the businesses listed and sold on BizBuySell service residential and commercial customers, with fewer focusing on industrial systems.

Electrical & Mechanical Contractor Business Transaction Trends

The median sale price of electrical and mechanical contracting businesses sold on BizBuySell has been on a gradual retreat after ballooning after the peak of the Covid-19 pandemic. In the five years from 2021 through 2025, the median price has fallen 15% but remains well above pre-covid values.

Electrical & Mechanical Contractor Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of revenue. They represent the sales price of a business relative to its financial performance, and given enough individual business sales data, they represent what the market is willing to pay for a business given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors such as interest rates, inflation, consumer spending, and overall economic growth. Electrical and mechanical contracting businesses have enjoyed steady growth in valuations through the pandemic years and into 2025 despite increasing interest rates.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - most valuations will hinge on a reasonable earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its overall sales.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of electrical and mechanical contractors for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are almost always higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners' common tendency to overvalue their own businesses.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context. Local business sale comps by sales class suitable for pricing and negotiations are available in BizBuySell's Business Valuation Report.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high volume, high value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Businesses with lower revenues, thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of electrical and mechanical contractor businesses are worth between 1.96 and 3.15 times their annual seller discretionary earnings, with 25% of exceptional, larger businesses trading above this range, and 25% of smaller, less desirable businesses trading below.

Financial Benchmarks

To determine how a business compares in terms of revenue and earnings relative to industry peers, it's necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business's financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated electrical and mechanical contractors financial ranges useful for comparing an individual business to the broader industry.

Electrical & Mechanical Contractor Revenue and Earnings Trends

Median revenue of electrical and mechanical contractors sold grew from 2020 through 2023, before falling in 2024 and 2025. Earnings moved in step, though margins were squeezed in 2023 by inflation-driven cost increases and higher interest rates.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to similar businesses traded on the business for sale market. Below you will find discretionary earnings ranges from electrical and mechanical contractors sold over the past five years, as well as from recent business for sale listings.

Revenue Ranges

Revenue volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall sales. The table below includes revenue ranges from electrical and mechanical contractors sold over the past five years, as well as from recent business for sale listings.

How Revenue and Earnings Level Affects Business Values

Clearly higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. Larger businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, an electrical contractor generating $3MM in annual sales may sell for an earnings multiple around 3, where a similar, smaller volume business with sales below $1MM may trade below 2 times its annual earnings.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Higher volume businesses give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable income.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader building and construction sector when benchmarking electrical and mechanical contracting businesses. The chart and table below includes key metrics from sales of building and construction related businesses on BizBuySell between 2021 and 2025.

Most types of building and construction businesses trade around a similar range of valuation multiples, and the primary driver of higher or lower relative business valuations is size and sales volume. Electrical and mechanical contractors are valued at similar levels to other specialty construction contractors, with a modest discount compared to plumbing and HVAC.

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