Decision summary
- Value is earnings you can prove, times a multiple, minus what never arrives at close.
- Subtract what it costs to replace you. Buyers will.
- Compare offers on cash at close, not the price on paper.
Request a Confidential Consultation
Step 1: What the business really earns
Start with the profit on your books for the last twelve months. Then two adjustments.
Add back personal and one-time costs that stop when you sell: your truck, family on payroll who do not work there, a one-time lawsuit. Only what you can prove with a receipt or a ledger entry. A buyer can accept, cut, or reject every one.
Subtract what a buyer pays someone to do your job. If you write the estimates, run dispatch, and hold the big property-manager accounts, pulling your pay out does not make that work free. Zero is rarely honest.
For a smaller owner-run shop, buyers look at what the business earns for one working owner: the profit plus your pay and your perks, because the next owner is going to work in it the same way you do. That measure is called SDE.
If you have a manager running the day and the buyer is keeping that team, they use EBITDA instead. Same starting profit, with two differences: a real manager's salary stays in as a cost, because somebody has to be paid to do that job, and the number is taken before loan interest, taxes, and the paper write-offs on your trucks and equipment. EBITDA is almost always the smaller number of the two, and the multiple paid on it is usually bigger, which is why comparing a multiple from one against a multiple from the other tells you nothing. Pick one and use it everywhere.
Step 2: The multiple
The multiple is what a buyer pays per dollar of those earnings. Across smaller HVAC sales reported on business-for-sale marketplaces from 2021 to 2025, the average runs around 2.75x and the median sale is around $750k. A cleaner shop that runs without its owner is worth more. You might expect closer to 4.0x to 5.5x for shops with real recurring revenue, a manager who can run the day, techs who stay, and books that reconcile. But all situations are different, so consider that a planning range, not an appraisal.
What moves your multiple:
- Recurring work. Active agreements, priced right. A big count with missed visits or old pricing does not count for much.
- How much runs through you. If it all does, the multiple drops or the money shifts into payments you have to earn later.
- One customer too big. A builder or property manager with a big slice of your revenue is a risk they price in.
- Crew. How long they have been there, who backs up who, and who holds the license.
- Books. Numbers that match across returns, statements, and job reports.
A worked example
| Profit on the books | $600,000 |
| + Add-backs you can prove | $80,000 |
| - Cost to replace your work | -$50,000 |
| Earnings a buyer will pay for | $630,000 |
| x 4.0 multiple | $2,520,000 |
At 5.5x the same earnings come to about $3.47M. Change any input and the number moves. That is the point: every assumption is visible.
Step 3: Cash at close
The price is not what hits your account. Here is one example of how the midpoint of that range, $2,992,500, could get split up. These are made-up numbers, not a typical deal:
| Price | $2,992,500 |
| - Held back, paid only if targets are hit (10%) | -$299,250 |
| - Paid to you over time (10%) | -$299,250 |
| - Debt paid off at close | -$150,000 |
| - What has to stay in the business | -$50,000 |
| - Deal costs (6%) | -$179,550 |
| Cash at close, before tax | $2,014,450 |
About $600k of that price depends on what happens after you sign. Money tied to targets pays only if the shop hits them, and by then the buyer controls pricing, staffing and the books. Money paid over time depends on the buyer still paying. Compare offers on cash at close first.
Reading a multiple you heard somewhere
Before you trust any number, ask:
- Is it a multiple of revenue or of earnings?
- Asking prices, or deals that actually closed?
- What size of company, and when?
- Does the price include the real estate, the trucks, or the cash left in the business?
A median from small-shop listings and a private equity deal are two different markets. One does not predict the other. A number with no source, no size range and no date is a rumor, not a benchmark.
Same revenue, different price
Two shops can both do $3M a year and sell for very different numbers. One has profitable service work, maintenance renewals that hold, and a manager who runs the day. The other lives on low-margin installs, one big builder, and an owner who closes every sale. Buyers pay for the first one.
Run your own number
Put your numbers in the HVAC business valuation calculator. If the range works, see how to sell an HVAC business and who buys HVAC companies. If it depends on add-backs you cannot prove yet, prepare your HVAC business for sale first. Weighing a broker? See broker vs. direct sale, or start at sell my HVAC business.