THE SHORT ANSWER
Reconcile completed jobs to annual results, including necessary estimating, scheduling, travel and callback work. Support adjustments and replacement duties instead of adding every owner payment back. Define vehicles, tools and liabilities included in the price. A billable-hour margin or generic industry multiple does not establish the value of a handyman company.
Start with explicit job costs, not a market margin
Trace actual job pricing, labor, materials, outside work, travel, credits and callbacks. Review canceled visits, quoting time and scheduling alongside billable work. Keep the cost definitions consistent and avoid deducting travel or labor twice.
| Invented specified-job example | Amount |
|---|---|
| Specified job revenue | $120 |
| Specified labor cost | −$65 |
| Specified material cost | −$20 |
| Specified travel cost, not already included | −$15 |
| Remainder after only these costs | $20 |
The specified costs total $100. A real service’s annual result requires all relevant revenue and costs, including work outside these specified jobs. Use actual records rather than assuming all billed hours have the same profitability.
Reconcile annual earnings and supported adjustments
SEC guidance on adjusted measures is an issuer-reporting presentation reference.
(SEC: non-GAAP financial measure interpretations)Have the accountant establish the starting financial measure, period and adjustments. Trace expenses actually deducted and their purpose. Draws, principal payments, capital purchases and all vehicle payments are not automatic add-backs. Necessary estimating, dispatch, purchasing, driving and repair work still needs coverage after the owner leaves.
Use the earnings-basis guide to distinguish SDE, managed earnings and cash after financing, tax and investment. Identify costs already deducted and show proposed new pricing, hiring or routing separately from achieved performance.
Evaluate the actual operating scope
Illinois IDPH plumbing guidance illustrates work-specific individual licensing and contractor registration.
(Illinois IDPH: plumbing licenses and contractor registration)This Illinois example does not set a national handyman rule or approve a business transfer. Review the actual jobs offered, qualified coverage and relevant agency conditions. Future services the buyer cannot yet provide are not established current earnings.
Compare actual transactions using relevant service mix, owner responsibilities, earnings definitions, period and included assets. No universal 2–3.5x range, 3x sector average, fixed size threshold choosing EBITDA or automatic reputation premium is established by this guide.
Define assets and proposed price delivery
SBA sale guidance addresses assets, liabilities and the agreement.
(SBA: closing or selling a business)Verify vehicle/tool ownership, condition, liens, leases and provider rights. Separate personal or rented equipment and identify necessary investment. Determine what the business price includes before adding every van and tool at replacement cost.
Review unfinished jobs, deposits, remaining costs, receivables and payables using the delivery guide. Prepare the evidence using the seller checklist for company-specific comparison and judgment. The business-value calculator computes a scenario from inputs; it does not certify a professional appraisal or verify the company’s market value.
Owner questions
Is the example $20 remainder business SDE?
It deducts only specified invented job costs; full annual financial reconciliation is still required.
Should all owner vehicle payments be added back?
Trace actual deducted expenses and necessary ongoing costs; no blanket vehicle adjustment applies.
Does reputation produce a fixed valuation premium?
Evaluate demonstrated customer behavior, transferable operation and relevant transaction evidence.
Sources and review scope
Source review completed . The sources below support the identified concepts or rules; they do not validate hypothetical amounts or a valuation of your business.
- SEC: non-GAAP financial measure interpretations
Staff interpretations last updated December 2022: recurring operating costs and distinguishing EBITDA from adjusted measures. SEC reporting context, not a universal private-sale rule or automatic acceptance of add-backs.
- Illinois IDPH: plumbing licenses and contractor registration
Illinois-specific individual licensing, contractor registration, insurance and apprenticeship supervision guidance. Not a nationwide rule, price for a personal license, complete statutory review or sale-transfer approval.
- SBA: closing or selling a business
Valuation approaches, sale agreements, assets and ownership transfer.
Confirm tax, legal, accounting and lending applications with the relevant professionals. Historical market observations describe the stated period and reported sample.
This is educational material. Industry figures and program rules can change; check the original sources and your advisors before applying them to a transaction. Calculator scenarios are not appraisals, lending decisions, or offers.
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