Electrical Business Valuations
Independent valuations for electrical contracting businesses across Australia.
Green Standard values residential service, new home, commercial, maintenance and solar electrical businesses. Two electrical contractors with the same profit can be worth very different amounts, because one may earn it from work that repeats and the other from work that has to be won again every year.
A commercial maintenance contractor testing and tagging equipment, servicing emergency and exit lighting and maintaining switchboards across a long list of sites is a different asset from a rough-in subcontractor that depends on two builders, or a solar installer whose year turns on an incentive setting. Add an owner who holds the only licence, quotes every job and works on the tools, and the same headline profit carries very different risk.
We examine the revenue mix, the licences, the workforce, the customers and the plant, then form a view on the earnings a new owner could reasonably expect to keep.
How much is a electrical business worth?
An electrical business is worth what its maintainable earnings support, weighted for how likely those earnings are to continue under a new owner. Two electrical businesses with the same EBITDA can be worth quite different amounts when one earns mostly from service work and commercial maintenance and the other depends on a few builders and the owner’s licence. The comparison below uses illustrative figures to show why.
Electrical businesses we value
What affects the value of an electrical business?
These are the questions we work through when we value an electrical business. Some raise value, some reduce it, and most matter only in combination with the others.
Revenue quality
Service versus project work
Service and maintenance work is priced by the hour or the visit and tends to repeat, while project work such as fit-outs and new homes is won against other bids and ends when the job does. We separate the two, and their margins, because a buyer will not price them the same way.
Commercial maintenance programs
Test and tag, residual current device testing, emergency and exit lighting testing, switchboard servicing and thermal imaging recur on set cycles because building owners and managers have compliance duties to meet. We look at the number of sites, how long each has been held, the visit calendar, and whether the testing register belongs to the business rather than to one technician.
Solar exposure
Solar and battery revenue depends on government incentives, certificate prices, equipment supply and household sentiment, and it can move sharply from one year to the next. We look at how much revenue and profit comes from solar, whether a strong year can be repeated, and the workmanship and product warranty obligations that stay with the business after each install.
Gross margin by work type
A blended margin hides a lot. Switchboard upgrades, hourly service, supply-and-install quotes and solar systems earn different margins, and we separate them where the job records allow.
Fixed-price jobs and work in progress
Fixed-price quotes put the risk of labour overruns and materials price movements on the contractor. We test quoted hours against actual hours, and look at progress claims, retentions and unbilled work at the valuation date.
People and licences
Owner billable hours
If the owner quotes, supervises and works on the tools, a new owner has to pay someone to do all of that. We deduct a market cost for the owner’s role before any multiple is considered.
Contractor licence and worker licences
Electrical work is regulated by each state and territory, and the contractor licence that lets a business take on electrical work is generally separate from the worker licence held by each electrician. The contractor licence often depends on a nominated licensed individual, and in many small businesses that is the owner. We establish who holds each licence and what a buyer would need to hold or arrange to keep trading.
Employees versus subcontractors
Employees give control over quality, availability and customer relationships, while subcontracting electricians give flexibility with fewer on-costs. Where subcontractors do the work employees would do, we adjust earnings for the on-costs a buyer would carry, and we leave the question of how they are classified to the owner’s accountant and lawyer.
Apprentices and supervision
Qualified electricians are scarce and apprentices take years to become productive. We look at tenure, licence status and the apprentice intake, and at whether there are leading hands who can run jobs without the owner on site.
Customers and relationships
Builder concentration
New home work is often won through a relationship with a builder’s site supervisor or director. We measure how many builders the business works for, how much each contributes over several years, the payment history, and exposure to a builder’s financial failure.
Commercial, strata and property manager accounts
Facilities managers, strata managers and real estate agents send repeat work, but often through a panel or schedule of rates that is re-tendered. We read how long each relationship has run and whether the customer would stay after a sale.
Contract terms
We read the terms: length remaining, renewal history, rates, response-time obligations, and any clause that lets the customer end the contract when ownership changes.
Reputation and lead sources
Reviews, search visibility, repeat households and referral partners bring work in. We check which of them belong to the business and would carry across to a new owner.
Assets and operations
Vehicles, test instruments and access plant
Fitted-out vans, test and tag units, thermal imaging cameras, cable tools and access equipment are needed to earn the profit. We consider their condition, calibration records and finance owing, and what it costs to keep them current.
Rectification, warranty and safety record
Electrical defects are costly to fix and a serious incident is costlier. We look at the history of callbacks, rectification and insurance claims, and whether compliance and safety records are kept in a form a buyer can rely on.
Systems and scheduling
Job management software, scheduling, price books and recurring-visit reminders make a business easier to run without its founder. They also give a valuer evidence that is otherwise hard to get.
Ability to operate without the owner
If the owner stepped away for three months, would the quotes still go out, the licensed work still be supervised, the testing still be done on schedule and the invoices still be raised? The answer shapes the earnings we adopt and the risk we apply to them.
How a buyer reads an electrical business
Buyers of electrical businesses include larger electrical groups adding capacity or a new area, facilities and building services companies adding a trade, solar and energy companies, and senior electricians buying their way into ownership. They are all asking the same question in different ways: how much of this profit will still be here once the current owner has gone?
Businesses with a long list of commercial maintenance sites, a visit calendar that fills itself, a licensed team and a brand that generates its own enquiries tend to attract the widest interest. Businesses that depend on a small number of builders, on the owner’s own licence, or on a single year of strong solar sales are usually priced more cautiously, even when their recent profits are higher.
A valuation works through the same questions, but independently and with the reasoning written down.
Adjustments we often make in electrical businesses
Reported profit is restated to what the business earns on a commercial footing before any method is applied. Every adjustment is listed in the report.
Owner wages
Replacing drawings, or a salary set for tax reasons, with a market cost for the work the owner actually does, including quoting and supervision.
Family members on payroll
Wages paid above or below market rate, or for roles that a buyer would not need.
Vehicles used privately
Private use of business vehicles, and private vehicles run through the business.
Related-party premises
A workshop or warehouse owned by the owner’s family trust or super fund and rented at other than market rent.
Incentive-driven solar peaks
A surge in solar or battery installs that followed a short-lived incentive or supply condition and would not recur at the same level.
One-off projects
A single large commercial job, or a builder relationship that has ended, that would distort maintainable revenue.
Subcontractor on-costs
Work done by subcontractors who function as employees, adjusted for the superannuation, leave and insurance a buyer would carry.
Rectification and bad debts
Unusual losses from a builder insolvency or a one-off rectification claim, separated from the normal cost of doing the work.
Information we typically review
You upload documents through the secure client portal after the engagement is confirmed. We send a list specific to your business; nothing needs to be gathered before the intake.
The financial pack
- Profit and loss statements, usually the last three years and the current year to date
- Balance sheets for the same periods
- Tax returns where relevant
- Payroll summary and employee information
- Vehicle, plant and equipment schedules
- Major customer information
- Recurring contracts and service agreements
- Revenue breakdown by service line
- Owner remuneration and drawings
- Unusual or non-recurring income and expenses
For a electrical business, also
- Revenue split by work type: service, commercial maintenance and testing, construction and project, solar and batteries
- Top ten customers by revenue for the last three years, with builder revenue shown separately
- Maintenance and testing contracts, site lists and renewal dates
- Test and tag, emergency lighting and switchboard testing registers and visit calendars
- Contractor licence and worker licence details by state, naming the nominated licence holder
- Solar installation counts by year, certificate claims, installer accreditations and warranty claims
- Employee list with role, licence, tenure, wage and apprentice year
- Subcontractor list with annual spend and how each is engaged
- Vehicle, test instrument and access equipment schedule, including finance owing and calibration records
- Work in progress, retentions held by builders, debtor ageing and builder payment history
- Job management system reports: job counts, average job value, lead sources
What a electrical business valuation costs
Fixed fees, confirmed in writing before work begins. The standard fee applies to most established electrical businesses.
Independent Business Valuation
$1,995+ GST
For established trade and field-service businesses requiring an independent valuation.
- Review of financial information
- Normalisation of earnings
- Valuation methodology selected for the business and purpose
- Industry and business risk assessment
- Consideration of plant, vehicles and equipment
- Owner dependency assessment
- Goodwill analysis
- Valuation range and conclusion
- Professionally prepared valuation report
- Draft provided before finalisation
Accountant and Adviser Partner
$1,495+ GST
For accountants and professional advisers who refer valuation matters regularly.
- Streamlined client onboarding
- Adviser kept informed with client authority
- Independent report addressed to the client
- Secure document portal for the client
- Repeat-client workflow
- Partner pricing on every referred matter
Complex Valuations
From$2,995+ GST
For matters with more moving parts. Quoted as a fixed fee in writing before work begins.
- Multiple entities or divisions
- Significant plant and equipment
- Unusual ownership structures
- Partnership and shareholder disputes
- Complex normalisations
- Significant customer concentration
- Historical valuation dates
Fees are fixed and confirmed in writing before work begins.
Electrical valuations: common questions
How much is an electrical business worth?
An electrical business is generally worth what its maintainable earnings support after a market wage is paid for the owner’s own work, adjusted for how much of those earnings would continue under a new owner. Commercial maintenance programs, licensed staff and a spread of customers support a higher value; dependence on the owner, on one or two builders or on a single strong year of solar work reduces it. Our guide on how much an electrical business is worth works through an example.
Does it matter that the business runs on my electrical contractor licence?
Yes. If the business can only operate under your licence, a buyer needs to hold a suitable licence themselves or employ someone who does, and they will weigh that cost and risk. Licensing rules differ by state, so we identify who holds which licence and what each jurisdiction would require of a buyer. It does not make the business unsaleable, but it is one of the clearest examples of value that sits with the owner rather than the business.
Solar made up a large share of our profit last year. How is that treated?
With caution. Solar earnings depend on incentives, certificate prices and equipment supply that can change quickly, so we look at several years, the margin on each system, and the warranty obligations that remain. If solar profit has been unusually high, we may adopt a lower level for maintainable earnings and say why.
We use subcontracting electricians rather than employees. Does that reduce the value?
Not by itself. Subcontractors give flexibility, but they offer less control over availability and customer relationships, and a buyer will ask whether the arrangements would continue. We look at how the work is divided and adjust for on-costs where subcontractors are doing what employees would do. Whether a particular arrangement would be treated as employment is a question for your accountant or lawyer.
Related industries and guides
Valuing a electrical business? Start with a short intake.
An Independent Business Valuation is $1,995 + GST, with a draft before the report is finalised. Typical turnaround is 3 to 7 business days once all required information has been received.