Selling a Plumbing Business in Tennessee

Half of the plumbing businesses sold on BizBuySell between 2021 and 2025 went for between 1.66 and 3.15 times owner earnings, with a median of 2.24. In 2025 the median sale price was $837,500 on median revenue of $1,044,630 and median owner earnings of $278,498. Your license, though, does not come with the sale. In Tennessee it cannot be transferred to another entity.

What a plumbing company actually sells for

Owner earnings, often called SDE, is your net profit plus your own pay, plus the personal costs that run through the company. Buyers price a multiple of that number, not of revenue.

| Measure | Lower quartile | Median | Upper quartile | | --- | --- | --- | --- | | Multiple of owner earnings | 1.66x | 2.24x | 3.15x | | Multiple of revenue | 0.42x | 0.59x | 0.85x |

Source: BizBuySell plumbing benchmarks, 226 sold businesses, 2021 to 2025.

A shop doing $900,000 in revenue with $200,000 in owner earnings is worth roughly $330,000 at the low end and $630,000 at the high end. The spread between those two numbers is not luck. It is the four things below.

The license problem nobody warns you about

Tennessee's Board for Licensing Contractors is clear: a license is not transferable to another entity. If a buyer forms a new company to buy your assets, that new company needs its own license, with its own qualifying agent who has passed the Tennessee Business and Law exam and the trade exam for Plumbing (CMC-A), which must be pre-approved before testing for a $50 fee. See the state's contractor licensing page and its note on transferring a license.

Two practical consequences for you:

1. A buyer without a license has to wait. Licensing takes time and a reviewed financial statement from a licensed accounting firm. The state sets each license's monetary limit at ten times the lesser of working capital or net worth. An unlimited limit needs $300,000 in both. 2. If you are the qualifying agent, you are part of the deal. Many owners are the license. A buyer will ask you to stay on in that role for a period, or will buy the entity instead of the assets so the license stays where it is. Decide early which one you can live with, because it changes the price and the paperwork.

If you are the license holder and you plan to be gone the day after closing, say so in the first conversation. It is the single most common reason a plumbing deal falls apart late.

Four things that move your multiple

• Recurring maintenance agreements. A book of service plans is income a buyer can count on. Project work that ends when you stop answering the phone is not.
• Licensed techs on payroll. A crew with journeyman and master plumbers is a barrier a buyer cannot rebuild in six months. It also solves the qualifying-agent problem for them.
• Customer concentration. One builder at 40% of revenue is a discount. A thousand homeowners is a premium.
• Books a stranger can follow. Tax returns that match your profit and loss, dispatch software that shows job counts, and a clear split between personal and company spending. Every hour a buyer spends untangling your books comes out of your price.

Start these 12 months before you want to sell. That is enough time to move the multiple a full turn.

How a sale gets paid

Three structures show up in small trade deals, and the headline price means less than the structure.

| Structure | What it means | Your risk | | --- | --- | --- | | Cash at close | Full payment at closing | Lowest, and usually the lowest number | | Seller note | Part at close, the rest in monthly payments | You are the lender if the business slips | | Royalty | A percentage of revenue for a set term | Payment rises and falls with the business |

A bigger headline price built on a long note can collect less than a smaller price paid mostly in cash. Run both through a payment schedule before you compare offers.

When selling to a direct buyer is the wrong choice

A broker running a competitive process can beat a direct buyer when your company is large, clean and growing, especially above roughly $1 million in owner earnings, where private equity buyers compete. The fee is real, usually around 10%, and the process usually runs 6 to 12 months, but the bidding can more than cover it.

A direct sale makes sense when you want speed, privacy, and a buyer who will not walk away after diligence. It also makes sense when your books are imperfect, when you are tired, or when you want your crew and your company name to continue instead of being folded into a roll-up.

If you want the highest possible number and you have time and patience, get a broker. If you want certainty and a short timeline, talk to a buyer directly. Both are honest answers.

Before you call anyone

Pull three years of tax returns, a current profit and loss, your customer list by revenue, your crew roster with licenses and tenure, and your maintenance agreement count. Those five things answer 80% of what any buyer will ask.

MC Asset Management buys service businesses directly. We have closed 16 business acquisitions across Tennessee, North Carolina, Georgia and South Carolina, and we keep the name and the crew. You can see a range and the structures we use at /business before you tell us who you are.

Not legal, tax or investment advice.