Your Electrical Contracting Business Is Worth More Than You Think—And Less Than You Hope

That gap between those two numbers? That's where I've watched owners either build generational wealth or walk away wondering what went wrong.

The Conversation That Keeps Repeating

I've lost count of how many times I've had this exact conversation.

An electrical contractor sits across from me. Maybe he's got three service vans and a crew of six. Maybe she's running a $3 million operation with a mix of residential rewires and commercial buildouts. Either way, they've built something real—usually from a single truck and a whole lot of 4 AM wake-up calls.

Then comes the question: "So what's it actually worth?"

And I have to give them the answer nobody wants to hear: It depends.

Not on some formula I pulled from a textbook. It depends on what a buyer will actually pay for. Do you have maintenance contracts that generate predictable revenue? Are your electricians licensed, trained, and sticking around? Can someone read your financials without needing a translator? Is half your revenue coming from one general contractor who could disappear tomorrow?

Here's what frustrates me most: the owners who ask this question usually ask it way too late. They're tired. They're ready to be done. And by then, they've already left serious money on the table—sometimes hundreds of thousands of dollars—without ever realizing it.

Part 1: What Your Electrical Business Is Actually Worth

Let's get one thing straight: your business isn't worth what you feel it's worth.

I know that stings. You've missed family dinners. You've crawled through attics in August. You've dealt with customers who swear they "just need a quick fix" that turns into a six-hour nightmare. That sweat equity feels like it should count for something.

And it does. Just not the way most owners think.

Buyers care about one thing: cash flow and how predictable it is. That's the whole ballgame.

The Mistake Almost Everyone Makes

Most owners I meet have made the same error. They asked their CPA for a valuation, got a single number—usually an EBITDA multiple—and figured they were done.

That's like checking only the oil and declaring the car roadworthy. You're missing the transmission, the brakes, the electrical system. Everything that actually determines whether this thing runs.

You need five valuation methods running side by side. Here's why each one matters:

One number can mislead you. Five numbers triangulated? That's closer to the truth.

The Real Electrical Contractor Benchmarks (January 2026 Data)

Here's where it gets specific. These are median multiples from actual private transactions—not generic rules of thumb from some book published five years ago:

Under $1 Million in Net Sales:

• Revenue Multiple: 0.49x

• Gross Profit Multiple: 0.78x

• SDE Multiple: 2.02x

• EBITDA Multiple: 2.70x

$1 Million – $5 Million in Net Sales:

• Revenue Multiple: 0.49x

• Gross Profit Multiple: 1.02x

• SDE Multiple: 2.55x

• EBITDA Multiple: 3.51x

Over $5 Million in Net Sales:

• Revenue Multiple: 0.45x

• Gross Profit Multiple: 1.34x

• SDE Multiple: 3.07x

• EBITDA Multiple: 3.86x

Notice the pattern? As businesses get larger and more established, the EBITDA and SDE multiples climb. That's not random—it reflects reduced risk, better systems, and less dependence on the owner.

A $500,000 revenue electrical shop might sell for 2x SDE. A $6 million operation with solid management? Potentially 3x or higher.

What Most Owners Miss Entirely

It's not just about what your business is worth today. It's whether that number is climbing or sliding—and why.

The contractors who command premium prices at exit? They track their valuation like a hawk. Quarterly. Sometimes monthly. They make deliberate decisions designed to push that number up over time.

I worked with an electrical contractor in Charlotte who spent $35,000 getting his entire crew certified on EV charging station installations. Seemed like a big expense at the time. When he sold eighteen months later? That investment added nearly $150,000 to his sale price. Buyers saw a company positioned for growth, not one stuck in the past.

Those "Owner Perks" Will Come Back to Bite You

Here's a conversation that gets awkward fast.

What's your actual market-rate salary? Not what you pay yourself to minimize taxes—what would you have to pay a general manager to run this operation?

That truck you drive to your kid's basketball games? The cell phone your whole family uses? The "team building" fishing trip you wrote off last summer?

Every single one of these affects your EBITDA and SDE calculations. And buyers will find them. During due diligence, they'll pick through your books like auditors on a mission.

Your Exit Value walks you through each adjustment before you ever sit down with a buyer. No surprises. No awkward explanations. No last-minute haircuts to your valuation.

Here's what I tell every owner: When you finally face a serious buyer, you need more than a number on a cocktail napkin. You need a professional Broker Opinion of Value with real methodology and industry comparables. That document signals you're not desperate. It gives both sides a legitimate starting point for negotiation.

Part 2: Your Exit Strategy Is Probably Backwards

Let me guess what you think "exit strategy" means.

Find a buyer when you're ready to sell. Right?

That's exactly backwards.

You should be thinking about your exit three to five years before you actually want out. Minimum. Because the things that make an electrical contracting business sellable—truly sellable at a premium price—take time to build.

The Statistic That Should Keep You Up at Night

More than 70% of businesses that go to market never sell.

Read that again. Seven out of ten owners who want to exit... can't.

Not because buyers aren't out there. Private equity firms are hungry for trade businesses. Strategic acquirers want to expand their footprint. There's capital everywhere looking for solid electrical contractors.

These businesses don't sell because they weren't prepared to be sold.

I watched a contractor in Tampa spend 25 years building a respected electrical company. Solid reputation. Repeat customers. When he finally decided to retire, he put it on the market and... crickets. Six months of showings that went nowhere.

The problem? He was the business. Every major relationship ran through him. Every bid required his approval. Every customer expected to talk to him personally. Buyers looked at that and thought, "When this guy leaves, what exactly am I buying?"

He eventually sold—for about 45% of what a properly prepared business would have fetched.

The 8 Factors Buyers Actually Evaluate

Whether they tell you or not, serious buyers are scoring you across eight dimensions:

1. Owner dependence — Can this thing function without you for 90 days?

2. Financial performance — Are the numbers clean, verified, and trending up?

3. Growth capability — Is there room to expand, or is this tapped out?

4. Customer concentration — Does losing one GC sink the whole ship?

5. Strength of systems — Are there documented processes, or is everything in your head?

6. Depth of management — Who's the second-in-command? Is there one?

7. Legal and compliance — Licenses current? Insurance adequate? Any OSHA issues lurking?

8. Strategic position — Where does this business fit in the market?

Weakness in any area creates a discount. Weakness in multiple areas? The discounts compound fast.

Your Exit Value scores you across all eight factors through an Exit Readiness Scorecard. You'll see exactly where you're strong, where you're exposed—and the specific dollar value each weakness is costing you.

Not Every Investment Returns the Same

This is where things get interesting for electrical contractors.

See the pattern? Some investments return 3x, 4x, even 5x. Others barely move the needle. You can't make smart bets without understanding the payoff.

Electrical Contractor-Specific Value Drivers

Let me get specific about what moves the needle in this industry:

• Licenses and certifications — Master electrician licenses, specialty endorsements (low-voltage, fire alarm, solar), manufacturer certifications

• Recurring revenue — Maintenance contracts, service agreements, long-term installation projects

• Customer diversity — Balanced mix of residential, commercial, and industrial reduces risk

• Geographic positioning — Urban markets with construction pipelines command higher multiples than rural areas

• Workforce quality — Skilled journeymen, low turnover, apprenticeship programs

• Systems and documentation — Estimating software, project management tools, safety protocols

• Strategic specializations — EV charging, smart home automation, solar installations, data centers

The platform generates a prioritized punch list for you. Every item has an estimated value increase attached. You'll know exactly where to focus your energy.

See the Whole Picture

Your Exit Value creates a Value Acceleration Roadmap showing:

• Where you are today

• Where you want to be at exit

• Exactly what to do each quarter to get there

When an owner can actually see the path from $600,000 today to $950,000 at exit—laid out in concrete steps—something shifts. It stops feeling abstract. It becomes a project with milestones.

Part 3: The Gap Nobody Wants to Talk About

Here's where most "how to value your business" advice completely falls apart.

It assumes you only care about selling.

But you don't just care about selling. You care about what happens after. You care about whether you can actually afford to stop working.

I've sat with contractors who sold their businesses, threw a party, bought a boat—and eighteen months later realized they were going to run out of money. It's brutal to watch. And it's more common than you'd think.

The Asset Gap

It's simple math, but almost nobody does it:

What you'll have after you sell minus what you'll need to fund 25 years of retirement equals your gap.

Positive number? You're set. Negative number? You've got work to do.

The Math That Crushes People

Let's say your electrical contracting business sells for $1 million. You think you're walking away with a million dollars.

You're not.

Half. You might walk away with roughly half.

Now the real question: Will $550,000—combined with your other savings—generate enough income for you and your spouse to live comfortably for 25 or 30 years?

For a lot of contractors, the honest answer is no. Not without a plan.

Your Exit Value's Asset Gap Calculator

This is where it gets practical. You input:

• Your estimated net proceeds after the sale

• Retirement accounts, home equity, other investments

• Personal debts and liabilities

• What you actually need to live on each year

The system gives you a straight answer: enough or shortfall. And if there's a shortfall, exactly how big it is.

No sugarcoating. Just the number.

Run the Scenarios Before They Run You

What if you could sell in three years instead of five? What if you pushed the sale price 15% higher through targeted improvements? What if the market softens and you get 15% less than expected? What if you trimmed your retirement budget?

You need to model these scenarios now—while you still have time to adjust.

Electrical Contractor-Specific Risk Factors

Every valuation needs a reality check. Here's what keeps buyers up at night when evaluating electrical contractors:

• Project concentration — Heavy reliance on new construction vs. service work creates volatility

• Customer concentration — One or two big GCs representing 40%+ of revenue is a red flag

• Licensing risk — What happens if the master electrician leaves?

• Labor market — Can you find and keep skilled journeymen?

• Regulatory changes — Code updates, permit requirements, safety standards

• Economic sensitivity — Construction slowdowns hit hard

These factors can knock 10% to 20% off your valuation. Operations with diversified revenue streams, strong management teams, and documented systems typically dodge the steeper discounts.

Monte Carlo Simulation: Know Your Actual Odds

Instead of assuming you'll earn a flat 6% on your investments forever (you won't), run what's called a Monte Carlo simulation. It models a thousand different market scenarios—some great, some terrible, most somewhere in between.

The output looks like this:

"Based on 1,000 simulations, you have an 85% chance of not running out of money before age 90."

If that number comes back at 65%? You know you need to either boost your sale proceeds, spend less in retirement, or delay your exit.

At least you'll know. And knowing beats hoping.

The Bottom Line

Your electrical contracting business is worth more than you think. It's also worth less than you hope.

The gap between those two numbers comes down to preparation.

Here's what separates the owners who win from the ones who settle:

✓ They understand their value today—not one number, but five methods triangulated with real transaction data

✓ They know their exit readiness—every weakness identified, every weakness priced

✓ They calculate their asset gap—and they model scenarios until they find a path that works

The contractors who walk away wealthy aren't always running the biggest operations. They're the ones who treated their exit like a project. Beginning, middle, end. Data, accountability, execution.

Whether You're Five Years Out, Just Starting to Think About It, or Ready to Sell This Year

The time to start is now. Not next quarter. Not after you finish that big job. Now.

Your Exit Value gives you the complete picture: valuation, exit readiness, gap analysis, and a step-by-step roadmap to the retirement you've earned.

[Get Started with Your Exit Value →]

Quick Reference: Electrical Contractor Valuation Benchmarks

Source: Median values from US private industry transactions, January 2026

Additional Value Adjustments to Consider