How to buy a plumbing business: where deals come from, what to check, how to pay for it

Part of the Plumbing guide: buying, selling, valuation and who is buying.

This guide is for someone who wants to own a plumbing company and has never bought a business. You will learn where plumbing deals come from, what to check before you pay, how the licence rules work when you are not a plumber, and how an SBA loan pays for most of the price. It is one part of our plumbing buying and selling hub.

Step 1: Why buy a plumbing business at all?

Plumbing demand does not switch off. The Bureau of Labor Statistics counted about 510,600 plumbers, pipefitters and steamfitters in 2025 and projects 7 percent job growth from 2025 to 2035, faster than the average for all jobs. It expects about 42,000 openings a year, many of them because workers retire or leave the trade.

That matters to a buyer. A company that already has licensed technicians, trucks and a customer list is worth more when new plumbers are scarce, and your biggest risk after closing is keeping those technicians. One more caution: the licence sits with a person, not the company, so a non-plumber buyer has a legal problem to solve first.

Step 2: Where do plumbing businesses for sale come from?

Plumbing deals come from four places, and good buyers work all four at once.

1. Listings. Business-for-sale marketplaces carry hundreds of plumbing listings at any time. Easy to find, so every buyer sees them, and asking prices run high. Our AI reads 15+ marketplaces every day and screens each listing against a client's buy box.
2. Brokers. Larger plumbing companies mostly sell through a broker, and brokers send new listings to buyers they trust first. A lender letter in hand gets you those emails.
3. Letters and calls to owners. List every licensed plumbing contractor in your territory and write to them. Most say no. A few are tired, and no broker has called them yet.
4. Retiring owners. The owner who started the company in the 1990s with no child in the trade is the classic seller. Supply houses and local inspectors know who they are.

Step 3: What should you check in a plumbing company?

Check the mix of work, the phones, the people, the trucks and the paper trail, in that order.

Service versus construction. Service and repair work (a homeowner calls, a truck goes, the job is paid that day) is worth more than new-construction work for builders, who pay slowly and can drop you. Ask for three years of revenue split by service, remodel and new construction.

Membership agreements. Many service plumbers sell a yearly plan with an inspection and priority booking. Count the active members, the renewal rate and what each member spent. It is the closest thing to recurring revenue in this trade.

Call volume and booking rate. Pull the phone and dispatch data: calls per month, how many became a booked job, average ticket and revenue per truck per day. A shop that books 70 percent of calls and one that books 40 percent are different businesses at the same revenue.

Technician count and licences. List every technician by licence level, years with the company, pay and whether they can pull permits. Then ask: who leaves if the owner leaves?

The truck fleet. Age, mileage and condition of each van, plus the drain machines, jetters and cameras in them. A fleet averaging ten years old is a capital bill you are about to pay.

Warranty and callback rate. How many jobs needed a second free visit last year? High callbacks mean sloppy work or bad parts, and the reviews will show it soon.

Permits and inspections. Permits pulled per year, under whose licence, and any failed inspections or complaints on the state board's public lookup.

Google reviews. Read the last hundred: the count per month over time, the share under three stars, which technician names keep coming up.

Dispatch software. Service plumbers run on field-service software that records every job. Ask for exports, not screenshots; the software is the truth, the P&L is the story.

Step 4: How do you read the numbers?

Price a small plumbing company on seller's discretionary earnings (SDE) and a larger one on EBITDA, and check both against the tax return.

Ask for three years of tax returns, profit-and-loss statements and the broker's add-back list. SDE is profit plus the owner's salary and personal spending run through the company. Challenge every add-back.

Then tie the books to the bank. Deposits should match reported revenue. A company that "does a lot of cash work" is telling you its earnings cannot be proved, and a lender will price it that way too.

Three things move the price inside the trade: the share of service revenue, whether a manager runs the day without the owner, and whether the licence holder is staying.

Step 5: What do plumbing businesses cost?

We do not yet publish plumbing-only multiples; sector figures from our own listing data are coming. What exists today is the market-wide picture from brokers' closed deals.

The International Business Brokers Association's Q4 2025 Market Pulse reports average multiples by purchase price across all industries. Deals under $2 million are priced on SDE and deals above on EBITDA.

Source: IBBA and M&A Source, Market Pulse Q4 2025. All industries, as reported by brokers.

Use these as a frame, not a price. A plumbing company with members, a manager and young trucks sits at the top of its band; a one-truck shop on the owner's phone sits below the bottom.

Step 6: What is the licence problem, and how do you solve it?

In most states a plumbing company can only sell and perform plumbing work under a licensed master plumber, and that licence belongs to a person. If you are not that person, you need one before you own the company.

Texas calls this person the Responsible Master Plumber. The Texas State Board of Plumbing Examiners says the RMP handles the general supervision and management of plumbing work done under contracts secured under their licence, must hold a Texas master plumber licence, must show at least $300,000 of commercial liability insurance, and can be the RMP of record for only one company at a time.

Florida uses the term qualifying agent. Under Florida Statutes section 489.119, a business that contracts must do so through a licensed qualifying agent. If that agent leaves and was the only licensed contractor in the company, the business has 60 days to employ another, and it may not contract until it does. The Department of Business and Professional Regulation runs the licence.

Other states have their own version of the rule. Check your state board before you sign a letter of intent, and ask a lawyer who knows contractor licensing.

A non-plumber buyer has three routes:

1. Keep the seller as the licence holder for a year or two, written into the purchase agreement with pay and an end date.
2. Promote a master plumber on staff to the role, with a raise and sometimes a small ownership stake.
3. Hire a master plumber before closing. Slower and dearer, but the business is yours from day one.

The lender will ask about it. A company that cannot legally work the day after closing is not one a bank wants to lend on.

Step 7: How do you finance a plumbing business?

Most buyers of a plumbing company pay with three pieces: an SBA 7(a) loan, a seller note and their own cash.

SBA 7(a) loan. The SBA's 7(a) program page sets the maximum loan at $5 million. Its terms page lists buying a business as a permitted use and sets the general maturity at ten years or less, unless the loan finances real estate or long-life equipment. The lender's rulebook is SOP 50 10; version 8.1 took effect on 1 October 2026 for new loan numbers. It sets a minimum equity injection for a complete change of ownership, which lenders commonly apply as 10 percent of the total project cost. Our SBA 7(a) explainer covers the rest.

Seller note. The seller lends you part of the price and is repaid over several years. It keeps the seller interested in a smooth handover. Read what a seller note is before you negotiate one.

Your cash. Plan for the equity injection plus working capital and closing costs. If the fleet is old, ask the lender to include a truck or two in the loan.

The number the lender lives on is the debt service coverage ratio: cash flow divided by loan payments. Our DSCR explainer shows the sum. Run your deal through the free SBA loan calculator before you offer, with a manager's salary taken out first if you will not be on the trucks yourself.

Talk to a lender before you have a deal; a pre-qualification letter is what gets brokers to send you the CIM. We introduce buyers to SBA lenders and investors; Acquisitions.com is an advisory firm and does not lend.

Step 8: What are the red flags?

The deals that go wrong usually showed one of these before closing.

• The owner is the only master plumber and will not stay. Without a licence holder there is no business.
• Construction revenue over half the total. Builder work is lumpy, low-margin and leaves with the builder.
• Cash jobs the books cannot show. Price as if they do not exist.
• Technicians paid as contractors or under the table. Back taxes become your problem; ask a CPA.
• Reviews drying up. Fewer new reviews often shows a year before falling revenue.
• Callbacks rising. Quality is slipping, usually because the owner stopped checking work.
• Permits pulled under a licence that is not the company's. Ask whose, and whether the board knows.
• A lease ending within two years with no option to renew, or a yard the owner keeps and rents back.
• One property manager or builder over a quarter of revenue. Ask what the contract says about a change of owner.

None of these alone is a reason to walk. Most are reasons to change the price or structure: a bigger seller note, or an earn-out tied to the technicians staying.

What happens after closing?

The first 90 days decide whether you bought a company or a decline. Keep the phone number, the name on the trucks and the pay plans, and meet every technician in the first week. The seller stays for a written transition, usually 30 to 90 days and longer if they hold the licence. Change nothing customers can see until you know why it is the way it is.

If you want someone on your side of the table from the first listing to the first 90 days, see how we work with buyers. Moran Pober has spent over ten years advising buyers and sellers and built and sold Rollups.com; plumbing is one of the sectors we see most.