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???? Welcome to Main Street Minute, your shortcut to Main Street acquisitions.
This week, we take you inside a deal for a $1.4M plumbing business.
Let’s dive in.
One of our community members — we’ll call them Dana — is deep in diligence on a nearly 20-year-old plumbing business generating around $3M in revenue and over $500k in SDE.
The business is split across new construction, remodeling, and service work, and it’s never officially hit the market.
Now she’s navigating legacy-focused sellers, potential key employee and customer risks, and a complex cash cycle. Her advantage? She’s bringing a licensed master plumber to lead the team, who also happens to be her son.
Let’s take a look under the hood.
This nearly 20-year-old plumbing business was built from the ground up by two retiring owners who started with a single truck.
Today, it generates around $3M in revenue and over $500k in SDE, backed by a 15-person team, including 4 master plumbers and a fleet of more than a dozen vehicles, some of which have been recently upgraded.
Roughly 60% of the company’s work is in new construction, with the remaining 40% split between remodeling and service. Dana sees upside in growing that latter segment, potentially a higher-margin side of the business, especially since the current owners haven’t invested much in marketing. Importantly, there’s also no major customer concentration.
The deal is priced at approximately $1.4M, and Dana plans to finance it through a mix of an SBA loan, a seller note, and an estimated $400k in working capital financing on top of the purchase price.
One of the bigger challenges? The sellers have never sold a business before and are cautious. They’ve requested no conversations with customers or employees before closing. Dana is working to secure post-signing access to key staff as part of the transition plan.
The community’s deal coaches agreed: the foundation looks solid. The real question is whether Dana can bridge the gap between a good business… and a great handoff.
The broader plumbing and HVAC contractor industry includes more than 105k companies, employs over 1.2M workers, and generates a combined $218B in annual revenue.
It’s fragmented, hyper-local, and increasingly strained by a nationwide skilled labor shortage, making experienced teams (like Dana’s target) harder to find and more valuable.
SBA lending activity in this sector has remained strong, with plumbing, heating, and AC contractors receiving hundreds of millions in 7(a) loans annually. It’s a sign of both lender confidence and ongoing buyer demand in the space.
Dana’s deal sits between two forces shaping the trades: construction plumbing, which rises and falls with building cycles, and service work, which tends to be more stable and higher margin. Her focus is on growing that latter side, and the business already has a solid base there.
What doesn’t it have? Much of an online presence. The company has a basic site and light SEO — no paid ads, no outbound. That could be a red flag… or a growth lever waiting to be pulled.
With a solid team and the right shifts, this business could be built for both durability and upside.
Dana’s offer of $1.4M lands just under 3x SDE, which aligns closely with industry benchmarks. Dana’s offer is slightly above the median — but not aggressive — especially given the company’s experienced team, modern fleet, and clean books.
The working capital requirement (an estimated $400k on top of the purchase price) does bump up total capital needed, but that’s common in construction-oriented deals where large projects can severely impact early cash flow.
The community’s deal coaches agreed: the multiple looks quite reasonable. The bigger variables now aren’t necessarily financial — they’re strategic.
The outcome may depend less on squeezing the price further and more on how Dana navigates due diligence, structures key protections into the deal, and manages the handoff.
Even strong deals come with trade-offs, and Dana’s team flagged a few key areas to navigate carefully.
The sellers don’t want Dana speaking to employees before close, including the most senior master plumber, who would be critical to a smooth transition. The concern isn’t just operational. It’s retention. During the deal review call, deal coach Lloyd Silver asked directly:
Dana said yes, and Lloyd recommended making that conversation a contractual contingency: once all other deal terms are locked, Dana can speak with the employee before close — and only move forward if the outcome is positive.
Construction plumbing means unpredictable timing: progress payments, material pre-buys, and warranty holdbacks (as required by certain state laws) can all strain early liquidity. Dana is budgeting $400k in working capital to stay ahead, but year one will demand tight cash management.
The sellers are thoughtful, but also new to the deal process. Their protectiveness over employee and customer relationships, while well-intentioned, has made diligence slower and more delicate. Dana is proposing a sign-then-close structure to unlock employee access after signing but before funding.
Not every insight from a deal lives in a spreadsheet. During the community review, a few key themes emerged that could shape the outcome of this acquisition.
The sellers are protective of their team, but the transition still needs to be thoughtful and intentional. Deal coach Hants emphasized the importance of a collaborative approach:
Whether or not formal agreements with employees are possible pre-close, the tone of the transition could shape retention more than any clause in the agreements.
This opportunity never hit the market, but it didn’t land in Dana’s inbox by accident. It came from a broker she’d previously worked with, who brought her the deal because she’d proven herself to be a serious and reliable buyer.
The fundamentals are strong. The plan is in motion. What remains is execution, and how well Dana can protect what’s working while building what comes next.
Dana’s full steam ahead, but this phase is where deals truly get made or lost. Her next moves:
As our deal coach Hants put it:
Dana has played it right so far. If she keeps this pace — and locks in the right protections — she could find herself walking into day one with a real edge.
This story scratched the surface of just one of the dozens of real deals we break down inside the community every month. Want in? Reach out to our team here.
The information contained here may not be typical and does not guarantee returns. Background, education, effort, and application will affect your experience. Your results will likely vary.
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