How to Sell Your Electrical Contracting Business
M&A guidance for electrical contractors considering a sale. Understand your valuation, attract qualified buyers, and navigate a successful exit.
The Electrical Market for Sellers
Electrical contracting businesses are in strong demand from buyers seeking exposure to construction growth, EV infrastructure, solar installations, and essential residential services. The skilled labor shortage has made established electrical companies with stable workforces particularly valuable.
Buyers range from private equity platforms building multi-trade home services companies to strategic acquirers expanding territory and individual operators seeking a turnkey business with established customer relationships.
The most attractive electrical businesses have diversified revenue (residential, commercial, industrial), proper licensing with multiple electricians on staff, and documented financials that show consistent profitability.
Current State of Electrical M&A
What's driving buyer activity and valuations in the Electrical sector right now.
EV & Solar Driving New Demand
Electrical contractors with experience in EV charging station installation, solar panel wiring, or battery storage are commanding premium valuations as these markets expand rapidly.
Multi-Trade Consolidation
Private equity groups are acquiring electrical contractors to add to HVAC and plumbing platforms, creating one-stop home services companies. This means more potential buyers for your business.
Commercial Contracts Add Stability
Electrical businesses with recurring commercial maintenance contracts, tenant improvement relationships, or municipal work benefit from stable revenue that buyers value.
Licensed Electricians Are Scarce
The nationwide shortage of licensed electricians means your workforce is a key asset. Buyers will pay more for companies that have solved the staffing challenge.
What Buyers Look for in a Electrical Business
Understanding these value drivers can help you prepare your business and command a higher multiple.
Multiple Licensed Electricians
Having several journeyman or master electricians on staff — not just the owner — ensures continuity and reduces buyer risk.
Revenue Diversification
A mix of residential service, commercial projects, and new construction makes the business more resilient and attractive.
Commercial Relationships
Ongoing relationships with general contractors, property managers, or commercial clients provide pipeline visibility.
Modern Testing Equipment
Up-to-date diagnostic equipment, thermal imaging tools, and properly equipped service vehicles signal professionalism.
Safety Record
A clean safety record and proper insurance coverage are essential. Any OSHA incidents or claims history will be scrutinized.
Clean Financial Records
Accurate job costing, clear SDE calculations, and three years of tax returns make valuation and due diligence straightforward.
How Electrical Businesses Are Valued
A clear explanation of how multiples work and what drives your number.
The SDE Method
Most Electrical businesses under $5M in revenue are valued using Seller's Discretionary Earnings (SDE). SDE represents the total financial benefit to a single working owner — essentially, net profit plus owner salary, personal expenses run through the business, depreciation, and one-time costs.
Once SDE is calculated, it's multiplied by an industry-specific multiple (typically 2 to 3.5 for Electrical) to arrive at an estimated business value. The specific multiple depends on revenue size, growth trajectory, customer concentration, and the value drivers listed above.
What About EBITDA?
There is also the EBITDA method — Earnings Before Interest, Taxes, Depreciation, and Amortization. Unlike SDE, EBITDA does not add back the owner's salary and is typically used for larger businesses ($5M+ revenue) with absentee ownership or multiple locations. We're showing SDE here because it applies to the majority of owner-operated Electrical businesses.
Example Valuation
Who Buys Electrical Businesses?
Different buyer types bring different deal structures, timelines, and pricing.
Private Equity
PE firms acquiring Electrical companies as platform or add-on investments. They typically pay the highest multiples, especially for businesses with $500K+ SDE.
Strategic Acquirers
Larger Electrical companies expanding geographically or adding capabilities. They value your customer base, team, and territorial presence.
Individual Buyers
Qualified individuals using SBA financing to acquire their first or next business. They want a stable, profitable operation they can manage.
How Selling Your Electrical Business Works
A proven five-step process designed to protect your confidentiality and maximize your outcome.
Confidential Valuation
We assess your financials, contracts, equipment, and market position to determine a realistic value range.
Preparation & Packaging
We prepare a Confidential Business Review (CBR) — a professional document that presents your business to qualified buyers.
Confidential Marketing
Your business is marketed to our buyer network. Every buyer signs an NDA before receiving any identifying information.
Negotiation & Due Diligence
We manage incoming offers, negotiate terms on your behalf, and guide you through buyer due diligence.
Closing & Transition
We coordinate with all parties to close the deal and support the ownership transition.
Common Challenges When Selling a Electrical Business
Being aware of these issues early lets you address them before they cost you money at closing.
Owner Holds the License
If the electrical contractor's license is in your name alone, transferring the business requires the buyer to have their own license or employ a qualifier. This limits your buyer pool significantly.
Project-Based Revenue Volatility
Heavy reliance on new construction or large one-time projects creates revenue swings that concern buyers. Service revenue and maintenance contracts offset this.
Bonding & Insurance Complexity
Electrical contractors carry significant bonding and insurance. Buyers will scrutinize your claims history and coverage levels during due diligence.
Key Employee Risk
If one or two senior electricians generate most of your commercial relationships, their departure post-sale is a major risk. Employment agreements or retention bonuses can help.
Electrical Business Sale FAQs
How much is my electrical contracting business worth?
Electrical contractors typically sell for 2.0× to 3.5× SDE. Companies with multiple licensed electricians, commercial contracts, and diversified revenue command higher multiples.
Can I sell if I'm the only licensed electrician?
Yes, but it's more challenging. The buyer will need to be licensed themselves or hire a qualifying electrician. Having additional licensed electricians on staff significantly increases your options and value.
What makes an electrical business more valuable?
Multiple licensed electricians, recurring service revenue, commercial relationships, clean safety record, modern equipment, and documented financials all increase value.
How long does it take to sell an electrical contracting business?
Most sales take 6–10 months from listing to closing. Well-prepared businesses with clear financials and proper licensing can close faster.
Do buyers want residential or commercial electrical businesses?
Both are in demand. Buyers appreciate diversification — a mix of residential service calls, commercial maintenance, and project work reduces risk and smooths revenue.
What records do I need to sell?
Tax returns (3 years), P&L statements, equipment list, employee roster with licenses, insurance and bonding documentation, customer concentration data, and any recurring contracts.
Will my employees keep their jobs?
In most cases, yes. Buyers acquire electrical businesses largely because of the skilled workforce. Retaining your electricians is typically a buyer priority.
Why Work With John Salony
Experienced M&A advisor serving business owners across the Southeast.
"John made the entire process feel manageable. He understood our industry, found the right buyer, and negotiated terms that exceeded what I thought was possible."
Ready to Explore Selling Your Electrical Business?
Schedule a confidential, no-obligation conversation. We'll discuss your goals, timeline, and what your business could be worth in today's market.
