National transaction benchmarks for building and construction business businesses.
Under $500K
Median revenue$661k
Median cash flow$142k
Median sale price$253k
Multiple range1.1x - 2.4x
$500K to $2M
Median revenue$1.84m
Median cash flow$362k
Median sale price$900k
Multiple range2.1x - 3.3x
Over $2M
Median revenue$5.56m
Median cash flow$1.03m
Median sale price$3.50m
Multiple range2.7x - 4.2x
A variety of factors can cause businesses to trade outside this range, including earnings quality, operational transferability, key-person risk, growth trajectory, and geography, so a listing priced above or below the typical multiple usually reflects real differences in the underlying business.
What to know about building and construction business acquisitions
Key diligence, valuation, financing, and transition considerations for buyers evaluating building and construction business acquisitions.
Examine the backlog and bonding, not just last year
Signed contracts, change-order patterns, and bonding capacity tell you what you're really buying; a big trailing year with an empty pipeline is a trap, and bonding is often tied to the owner personally.
Confirm the license qualifier transfers
Many trades require a licensed qualifier that may leave with the seller. Verify what you must hold before you can legally operate.
Separate recurring service work from one-time projects
A plumbing or HVAC company with a service-and-maintenance base is worth far more than one living on new-construction bids — service agreements generate steady recurring revenue and replacement leads.
Understand the working capital the business needs
Receivables, retainage, and work-in-process tie up real cash between billing and collection; establish the need and whether it's in the deal.
Find out who actually runs the jobs
The estimator, project managers, and lead crews carry the business. Identify the key people, their pay, and retention after close.
Pressure-test the add-backs and equipment
Trucks, heavy equipment, and related-party rent distort earnings. Tour the fleet, check deferred maintenance, and stress the discretionary earnings.
Frequently Asked Questions
Answers to common buyer questions for this market.
Yes, especially those with recurring service revenue. Lenders focus on license and bonding transfer, customer concentration, and whether the business runs without the owner estimating every job.
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