How to Evaluate a Plumbing Business

Plumbing involves the installation, maintenance and alteration of all piping, fixtures and appliances that are used for potable water, drainage and venting systems. It also includes the installation and servicing of water heaters.

The industry is highly competitive and requires a significant amount of specialized training and knowledge. Licenses can be earned through trade schools or college programs, or through a learn-while-you-earn apprenticeship with classroom attendance. Those who work in this field may face a variety of challenges, including cuts and lacerations due to piping and working in tight spaces, as well as exposure to contaminants, fumes, and mold from water-damaged materials. In addition, a plumber must be prepared for long periods of time on-site.

From Pipes to Fixtures: Exploring the Basics of Plumbing Systems and Maintenance

Often, homeowners make upgrades to their plumbing in hopes of increasing the value of their home or enhancing the comfort of living conditions. While these upgrades are generally cost-effective, it is important to carefully consider the options before making any changes. A poorly planned or executed plumbing upgrade can be costly and may not provide the desired return on investment.

One of the most important factors to consider when evaluating a plumbing business is whether it does construction jobs. If the company works on new construction, it is more likely to be exposed to economic cycles, as new construction tends to decline during recessions. This can dramatically affect gross margins and the multiple of a prospective acquisition. A buyer should also be sure that the management team has sufficient experience running a plumbing business.