Sell a plumbing business in Texas
Plumbing companies sell on the strength of their service work, their crews, and the licensed plumber the company works under. In Texas, that last point is set by the state plumbing board, and it shapes how a sale is structured from the first conversation.
Here is what plumbing buyers check first, the records to pull together before you sell a plumbing business, and how the Responsible Master Plumber rule affects the transfer.
What buyers of a plumbing business look at first
Plumbing buyers separate steady service revenue from project work that has to be won again every month.
Service versus new construction
Repair and drain work from homeowners behaves very differently from builder contracts. Buyers want the split by month.
The Responsible Master Plumber
Who serves as the company's Responsible Master Plumber, and whether that person stays after closing.
Crew structure
How many licensed plumbers, apprentices, and helpers the company employs, and who supervises the field.
Builder and property manager relationships
Whether large accounts are under contract and how much revenue each one represents.
Warranty exposure
Open warranty obligations on installs and new construction work that a buyer would inherit.
Truck stock and inventory
What is carried on each truck and in the shop, and how it is counted.
Records to prepare for a plumbing sale
Plumbing buyers ask for records that tie revenue to the people and accounts behind it. The general document list is on our how to sell a business guide.
Revenue by job type
Service and repair, drain and sewer, water heaters, remodels, and new construction, by month for several years.
License roster
Each employee's license level and expiration, including the Responsible Master Plumber.
Builder and commercial contracts
Terms, pricing, payment history, and whether the contract allows assignment to a new owner.
Inventory count method
How truck and shop inventory is counted and valued, since it is often adjusted at closing.
Permit and inspection history
A record of permits pulled and failed inspections shows buyers how the work is managed.
How earnings are measured for a plumbing business
An owner who runs jobs, manages the crews, and holds the master license is usually selling a business measured on SDE, because the buyer will step into that role. SDE adds one owner's pay and benefits back to pretax earnings before interest and depreciation.
When the company has a general manager and field supervisors and the owner is mostly in the office, buyers lean toward EBITDA, which keeps a market salary for management as an expense. Builder heavy companies are often analyzed both ways, with attention to how steady the work has been.
Plumbing add backs that need documentation
- Owner compensation above a market wage for the role the buyer will fill
- Personal use of company vehicles and equipment
- A one time warranty claim or legal settlement
- Rent paid to the owner above market rate for a building the owner also owns
- Nonrecurring costs such as a move, a software change, or a large bad debt write off
Texas plumbing licensing and the sale
Plumbing in Texas is licensed by the Texas State Board of Plumbing Examiners (TSBPE). The board states that a company offering plumbing services to the public must secure the services of at least one Responsible Master Plumber, and that a Responsible Master Plumber may act as the Responsible Master Plumber of record for only one company at a time.
If the selling owner is the company's Responsible Master Plumber, the buyer needs another one in place, and that person cannot already serve another company in that role. Settle the plan before the letter of intent, and confirm current board requirements and any local registration rules with TSBPE and counsel.
Keeping a plumbing sale confidential
Plumbers, builders, and supply houses talk to each other every day.
- Builders and property managers should hear about the sale from you and the buyer together, after the deal is secure.
- Licensed plumbers are in demand. Tell them late, with retention terms ready.
- Supply house representatives often know the business well. Keep inventory counts and supplier pricing out of early marketing materials.
- Use a blind profile that describes the service mix without naming the area too precisely.
Pricing a plumbing business
A plumbing company with repeat service customers, documented crews, and a Responsible Master Plumber plan carries less risk for a buyer than one built on a few builder accounts and the owner's license.
Forge prepares a broker opinion of value from the recast earnings, the condition of the assets, the risks a buyer would take on, and market evidence. A broker opinion of value is not a certified appraisal and is not a substitute for one. If a lender, a partner, or a court needs a formal appraisal, that is a separate engagement with a credentialed appraiser. Our business valuation page explains how the opinion is built.
Questions from plumbing company owners
What happens if I am the Responsible Master Plumber for my company?
The buyer needs someone else to fill that role after closing. TSBPE states that a Responsible Master Plumber can serve only one company at a time, so the replacement cannot be serving another company in that role. Agree on the plan before signing a letter of intent.
Do builder contracts transfer to a buyer?
Only if the contract allows it or the builder agrees. Review each contract for assignment and change of control terms, and expect a buyer to ask how long each relationship has lasted.
How is truck and shop inventory handled in a plumbing sale?
It is commonly counted near closing and either included in the price up to an agreed level or paid for separately. The purchase agreement sets the method.
Will buyers discount a plumbing company that depends on new construction?
They will look harder at it, because new construction work rises and falls with building activity. Several years of monthly revenue by job type helps buyers judge how steady the work has been.
Can I stay on after selling my plumbing business?
Many buyers want the seller to stay for a transition period, and some want the seller to remain the licensed plumber for a time. Those terms are negotiated in the letter of intent and purchase agreement.
Talk to Forge about selling your plumbing business
Inquiries are confidential. Financial documents come later, after a confidentiality agreement is in place.
Related pages
Thinking about selling your plumbing company?
Talk to Forge confidentially about your crews, your accounts, and how the license will transfer.