A plain-English guide for Texas electrical, HVAC, roofing, and plumbing contractors considering a sale. What buyers look for, how valuation works, and what you can do now.
Think of it this way. You spent 20 years building a machine. A good one. It makes money. It employs people. It has a real reputation in this market. The only problem is you forgot to build a door. The machine runs beautifully. You just can't leave.
That is most specialty contracting businesses in Texas at some point in their life.
I have sat across from contractors who called me the week after a health scare. Guys who built real businesses. $2M, $4M in revenue. Good crews. Loyal customers. Phones still ringing. And they needed out. Yesterday. You know what they got for all of that? They got what any market gives a seller who needs to close in 30 days. Which, I will tell you, is not a lot.
The contractors who planned two or three years ahead? Completely different story. Same business on paper. Sometimes twice the money at the table. The preparation is the product.
Berkman Woods buys specialty contracting businesses. I have been in the room for dozens of these deals, from the ones that closed cleanly to the ones that blew up in week three of diligence. What follows is a straight account of what makes these transactions work, what kills them, and what you can do right now.
Most contractor sales are structured as asset purchases. The buyer acquires the contracts, equipment, employees, brand, and goodwill, not the legal entity. This matters for how taxes get structured and how liability transfers at close. Your attorney and CPA need to be in every serious conversation about this.
For deals in the $2M–$8M enterprise value range, which covers most specialty contracting businesses with $500K–$2M in EBITDA, SBA 7(a) financing is the most common buyer tool. It lets buyers close acquisitions with as little as 10% equity down. It expands who can buy your business significantly, and it typically gets deals closed in 60–90 days from a signed letter of intent.
We are a buyer. Here is what we look at when we sit down with a contracting business.
Recurring or repeat revenue. Master service agreements, maintenance contracts, established commercial relationships. These are worth more than a truck full of one-off residential jobs. A contractor doing 70% commercial MSA work looks nothing like one chasing storm damage door to door, even if the revenue number looks similar. Cash flow visibility is what buyers pay a premium for.
Owner dependence. This is the single most common deal killer in specialty contracting. If every key customer relationship, every estimate, and every subcontractor call goes through the owner personally, buyers will discount heavily or walk. You do not need to fully step away before selling. You do need someone else who can run the operation when you are not there.
Clean financials. Three years of tax returns that tell the same story you are telling buyers verbally. Personal expenses through the business are common and acceptable. They need to be documented and explainable as addbacks. Undocumented cash ends deals. Every time.
Workforce stability. Licensed tradespeople who will stay after close. In DFW and across Texas, the people are the business. Buyers are paying as much for the team as for the book of work.
End market strength. Buyers in North Texas pay premium multiples for contractors serving commercial construction, data center buildout, power infrastructure, and the high-growth corridors of Collin County, Denton County, and the Frisco–McKinney–Allen stretch.
Specialty contracting businesses in Texas typically trade at 3x–6x EBITDA. The range is not random. It is driven by everything I just described.
A roofing company doing $3M in revenue with $600K EBITDA and heavy owner dependence might trade at 3.5x. That is a $2.1M sale. The same company with documented processes, a strong foreman who runs jobs without the owner present, and three commercial maintenance agreements might trade at 5x. That is $3M. That is $900K of additional value from preparation alone. Revenue did not change. The business changed.
EBITDA is net income plus interest, taxes, depreciation, and amortization, adjusted for personal expenses the owner runs through the business and one-time costs that will not recur. These adjustments are called addbacks. They are standard in every deal. What is not standard is claiming addbacks you cannot document.
Buyers using SBA financing also underwrite DSCR, the debt service coverage ratio. The business must generate enough cash to service the acquisition loan from its own operations. This is another reason clean financials matter. The SBA lender underwrites the business independently of the buyer.
DFW is one of the most active specialty contracting M&A markets in the country. Population growth in Collin County, one of the fastest-growing counties in the U.S., is driving sustained demand for electrical, HVAC, plumbing, and roofing work that does not behave like a cyclical market.
Private equity-backed platforms and independent sponsors are actively targeting contractors in North Texas. That competition is good for sellers. But deal economics shift with interest rates, and this window will not stay open on this timeline indefinitely.
Start now. Not next quarter.
Get your financials on an accrual basis and make sure your tax returns reflect actual business performance. Document your key processes: estimating, project management, billing, collections, so the business can operate without you explaining everything from memory. Start transitioning customer relationships to a foreman or operations manager you trust. Get a preliminary valuation from someone who actually buys businesses, not a broker who lists them.
Also understand whether your business qualifies for SBA acquisition financing. Certain structures, ownership arrangements, and business types affect buyer eligibility. That directly affects who can buy your business and on what terms.
Berkman Woods acquires specialty contracting businesses in Texas and the broader Southwest using SBA 7(a) financing and private capital. We work with owners who are 12–36 months from a transaction and those ready to move now. If you want a direct conversation about what your business is worth, no broker involved, that conversation starts here.
Related: For Business Owners · Specialty Contracting
