Value a Home Services Business: Reconcile Trade Lines and Shared Costs

Build a consistent trade-to-company bridge

Separate earned plumbing, HVAC and electrical work where records support it. Identify shared technicians, billing, referrals and work billed under one trade but delivered by another. Reconcile job costs, refunds and warranties to the general ledger without counting cross-sold revenue twice.

Document the cost-allocation method and what each line already includes. Shared dispatch, management, marketing, rent and fleet expenses must be accounted for once, with the accountant’s review. Apparent high trade margins can simply reflect costs left outside a segment report.

Choose one explained earnings basis

Use the earnings basis guide to reconcile the whole-company measure. Identify the owner’s production, management, estimating and administrative work, including supported replacement costs under the proposed operating model.

SEC guidance addresses adjusted measures in issuer reporting.

Use it as a presentation reference with accountant review. Owner draws, vehicle principal, capital purchases and undeducted personal spending are not automatic expense add-backs. Do not remove shared recurring costs because a buyer might have an existing team; buyer-specific synergies require their own supported analysis.

Review operating permissions and capacity by trade

Prepare a jurisdiction/activity/person register for each trade rather than one blanket company qualification. Identify departures that could affect supervision, permits, staffing or actual production.

Illinois IDPH distinguishes individual plumbing licensing and contractor registration.

Use this state example for plumbing questions, not nationwide clearance or a rule for all three trades. Have the responsible authorities and advisors review each actual service. Use the plumbing guide, the HVAC guide and the electrical guide for distinct operating evidence.

Test actual drive time, completed jobs and dispatch cost if route efficiency is claimed. ZIP proximity, telematics software or cross-selling potential alone does not prove achieved earnings or assign a price premium.

Define shared assets and comparison scope

SBA sale guidance addresses assets and liabilities in the agreement.

List shared vehicles, tools, equipment, inventory, receivables and open work only once in the agreed price scope. Review title, condition and liabilities; do not add all fleet value on top of a whole-business earnings value that already includes it.

Compare evidence with consistent measures, reporting periods and included assets. A national HVAC SDE statistic cannot simply become an electrical EBITDA multiple or a guaranteed blended company range. Use the working-capital worksheet to clarify delivery.

Support any claimed preparation benefit with actual before-and-after earnings, costs and comparison evidence. No fixed route, recurring-revenue or management premium is established here.