What Is an Electrical Business Worth? SDE Reality vs the Platform Multiple

The short version

• The high multiple you saw quoted for electrical is an EBITDA multiple for a PE platform roll-up, not the multiple a $500K-$2M owner-operated shop sells at.
• A Main Street electrical business sells on SDE, and the canon Service-bucket range runs from about 1.3x at the bottom to 4.5x at the top, by earnings band.
• An owner-dependent service business transacts near 1.65x and an owner-light one near 3.5x, a $555,000 gap on a $300,000-SDE business.
• The master license that transfers and a real commercial service-contract book pull the multiple up; a business that hinges on the owner's license and runs on lumpy project work holds it down.
• Below: the real SDE multiple, why the platform number is not yours, and the dollar gap independence closes.

You read that electrical contracting trades at a high multiple, you ran it against your $330,000 of earnings, and you built a retirement number on it. That number was never yours.

The high figure is an EBITDA multiple paid by private-equity platforms buying their way to scale, on consolidated electrical companies with managers already in the seat. A $1.6M-revenue owner-operated shop is a different transaction priced a different way.

This is the electrical trade view of what your business is worth, built on the one correction every broker page skips.

What an electrical contracting business actually sells for

A Main Street electrical business sells on SDE, not EBITDA, at a low-single-digit multiple. The canon Service-bucket SDE ranges run 1.3-2.3x under $100K of SDE, 2.4-3.2x from $250K to $500K, and 3.5-4.5x above $1M, with a typical owner-operator in the low single digits and the all-industry median near 2.0-2.5x.

That is the number a buyer underwrites, and it is calibrated against a decade of real closed transactions. The high platform multiple you saw is a separate animal entirely.

Electrical maps to the Service business-type bucket, where the ranges above are canon-stable through COVID, the 2022 rate cycle, and 2025 tariff uncertainty. Those Service-bucket bands are the honest starting point for an electrical business; where you land inside the band is set by owner-independence and the contract mix, not by the trade label.

One thing the band table already tells you. At $330,000 of SDE you are in the $250K-$500K band, so your honest starting multiple is in the low single digits, not the platform number.

The real electrical multiple is an SDE multiple, not an EBITDA multiple

The gap between what you read and what you will be offered is the difference between two metrics. Hold the two states side by side.

• The platform number (EBITDA): a PE roll-up buys a consolidated electrical company that already runs on a hired management team, and pays a multiple of EBITDA, which is earnings after a market salary for that team is subtracted.
• Your number (SDE, low single digits): a buyer steps into your seat, takes your pay as part of the return, and pays a multiple of SDE, the earnings that include your salary.

Those are not two opinions about the same business. They are two different businesses, priced on two different earnings figures, by two different kinds of buyer.

The reason this matters in dollars is the salary line itself. Run the full method in SDE vs EBITDA, an SDE multiple not an EBITDA multiple, because that one line is the whole correction and the horizontal post carries the depth.

We will not re-teach the method here. The electrical-specific point is narrow: you are an SDE seller, the platform press release is an EBITDA buyer, and the broader valuation approach behind the trade number starts from your SDE, not theirs.

What the master license and the contract mix do to the number

Here is the part that is specifically electrical and not generic valuation. The first thing a buyer or successor has to solve is whether the qualifying license transfers with the business, because the company may legally hinge on the owner's license.

A master license that stays with the business, held by a qualifier who is not walking out the door, removes the single largest transfer risk in the trade. A business that legally depends on the owner's personal license carries that risk straight into the offer.

The direction is not in doubt: a transferable license supports the multiple, and a license that leaves with the owner discounts it.

The contract mix is the second electrical-specific lever. A real book of commercial service contracts is recurring revenue a buyer pays more for, because it arrives without the owner winning it again on every job.

Pure project and new-construction work is the weight on the other side. That revenue is lumpier and harder to underwrite, so a business running on it holds nearer the bottom of its band than one with a commercial service-contract book.

On the lender side, Service businesses sit at the low-risk end of SBA charge-off ordering, which supports a buyer's confidence in the cash flow. That is a confidence read for the financing, not something that raises the value on its own.

The independence discount, priced in dollars

Strip the trade detail away and one lever explains most of the spread between a low electrical multiple and a high one. It is owner-independence, the same driver the rest of this site runs on.

An owner-dependent service business transacts near 1.65x SDE. An owner-light one transacts near 3.5x.

On a $300,000-SDE business, that spread is $555,000 of value, with not one dollar of revenue changed. That is the gap between a buyer pricing you as a job and a buyer pricing you as a business that runs without you.

For an electrical shop, owner-independence is concrete. It is the license held by a qualifier the company can keep, and the commercial relationships held by the business rather than by you personally.

This is also why the number and the sale are the same project. Turning that number into a sale at the higher multiple, license transfer included, is the work of closing the discount before a buyer ever sees the books.

The 86% of owners who have no professional valuation or only a rough estimate are the ones who discover this spread at the closing table instead of three years early. The earlier move is to find your own number first and see which end of the spread you sit on.

How to get your real electrical number

You now know the band and the lever. What you do not know yet is where this specific electrical business sits on the 1.65x-to-3.5x spread, and that is the only number that decides your real price.

The free Keystone diagnostic answers it. Eighteen questions, four minutes, and you get three scores plus an estimated sale price calibrated against 10 years of BizBuySell Insight Reports and 1.6M+ SBA 7(a) loan records.

It shows you where your license dependence and your contract mix are pulling the multiple, and in what order to fix them. That is the gap between your starting multiple and a higher one, named in dollars.

FAQ

What multiple does an electrical contracting business sell for?

A Main Street electrical business sells on a low-single-digit SDE multiple, not the high EBITDA figure quoted for private-equity platform roll-ups. The canon Service-bucket SDE range runs from about 1.3x at the bottom band to 4.5x above $1M of SDE, with a typical owner-operator in the low single digits.

How do you value an electrical contracting business?

You value an electrical business by applying an SDE multiple to its seller's discretionary earnings, then adjusting for owner-independence, the license transfer, and the commercial contract mix. The starting multiple comes from the earnings band, and the adjustment up or down is mostly about how much the business depends on the owner.

Does the master license affect what an electrical business is worth?

Yes, because the qualifying license is often the legal basis the business operates on. A license that transfers with the company supports the multiple, while a business that hinges on the owner's personal license carries transfer risk a buyer prices as a discount.

What is SDE for an electrical business?

SDE, or seller's discretionary earnings, is the total return to a single owner-operator: net profit plus the owner's salary, benefits, and add-backs that do not transfer to a buyer. Main Street electrical businesses are quoted and multiplied on SDE because the buyer steps into the owner's seat and takes that pay as part of the return.

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You cannot price your electrical business on a multiple that was never yours.

The free Keystone diagnostic gives you three scores and an estimated sale price, calibrated against 10 years of BizBuySell Insight Reports and 1.6M+ SBA 7(a) loan records. It shows you where this specific business sits on the 1.65x-to-3.5x spread, not the platform number.

Get your three scores and an estimated sale price, free, at app.trykeystone.io.

Keystone Core opens the full value range and tracks the number monthly as you close the independence discount, and Pro adds the buyer view for an owner preparing for a buyer's diligence. The starting multiple is where you begin, not where you end.