The short answer
The handful of published Australian guides we could find, 2026 commentary from one business-for-sale marketplace and one adviser who writes on two websites, put plumbing and electrical contracting businesses at roughly two to four times adjusted earnings. For a business with employed licensed staff, adjusted earnings means EBITDA after the owner has been charged a market wage for the work they actually do. Owner-operators with no staff are quoted lower again, from around one to two and a half times, and some guides use seller's discretionary earnings (profit with the owner's pay and personal expenses added back) as their base, because those dollars are largely the owner's own labour. Managed businesses with a recurring maintenance book are quoted towards the top of the band, and some guides quote above it for large commercial or specialist contractors. This is adviser commentary on differing earnings bases, not a transaction database, and asking prices are not settled prices. In this sector three questions move a business within it or outside it: who holds the licences the business needs to operate, how much of the revenue returns without the owner winning it again, and what the vehicles, tools and workshop will cost the next owner to keep running.
What a buyer is really paying for in a trade business
A plumbing or electrical business owns vans, tools and stock, but a buyer can replace those for a known price. What a buyer cannot simply go and buy is a team of licensed people who will turn up for the new owner, and a flow of work that does not depend on the old owner's phone number. That is what the multiple pays for. It is also why the owner's role matters so much: in many of these businesses the owner is the estimator, the salesperson, the licence holder and the best tradesperson at once, so part of the reported profit is really a wage for four jobs. The practical test is whether the diary would stay full and the work get done if the owner stepped away for a quarter. A buyer also pays only for what can be evidenced: job data by technician and customer, recurring agreements in writing, and accounts that capture all of the income. Income that never reached the books cannot be verified, so it cannot be priced.
Licences belong to people, so key-person risk is also a legal question
Each state regulates who may carry out and supervise plumbing and electrical work, and the regulators' own pages show a consistent pattern: technical competence is tied to named individuals, and the licence is not a transferable asset of the business. A buyer cannot buy the licence. They buy a business whose licence position they must be able to rebuild from the first day, through their own qualification or an employee who will stay. Three valuation consequences follow. If the owner is the only qualified person, the market cost of a qualified replacement comes off earnings and the transition risk is priced. If the nominee is an employee, that person's contract and intentions matter as much as any customer contract, because a departure starts a regulatory clock. And where an owner trades through a trust or several entities, the licence, assets and contracts may sit in different places, which shapes what can be sold. Rules differ by state and trade and change, so the relevant regulator must be checked. Examples from regulators' pages:
- ·New South Wales: a company or partnership contractor licence must have a nominated qualified supervisor holding an individual contractor licence or qualified supervisor certificate for the same work, who may be a director, partner or full-time or part-time employee but not a casual employee, temporary worker or subcontractor. Building Commission NSW may cancel a licence that goes more than 30 days without an acceptable supervisor unless it has consented.
- ·Queensland plumbing and drainage: the QBCC requires a company licence to have a nominee who is an employee, secretary or director and holds a nominee supervisor or individual contractor licence for the same scope, and requires notice within 14 days when a nominee stops acting.
- ·Queensland electrical: an electrical contractor licence cannot be transferred, and the holder needs at least one qualified technical person and one qualified business person, who may be the same individual.
- ·Victoria electrical: Energy Safe Victoria registers individuals, partnerships and companies and requires a technical supervisor and a business supervisor. A business trading through a family trust must register its trustee company. Changes affecting a nominated supervisor must be notified within ten working days.
- ·Western Australia plumbing: the plumbing contractor's licence is stated to be not transferable.
Reactive service, maintenance contracts and project work price differently
Revenue in a trade business is really three earnings streams. Reactive service (call-outs, repairs, replacements) is repeat work won on reputation, but each job stands alone. Maintenance agreements with property managers, strata managers or commercial owners are written and recurring, and the published guides treat them as the strongest driver of a higher multiple. Project and new-build work, usually subcontracted to builders and head contractors, is lumpier: margins depend on quoting accuracy, retentions and slow payment tie up cash, and a few builders can account for much of turnover. The published guides put the warning level for a single customer anywhere from 15 to 30 per cent of revenue. A buyer prices a maintenance contract on its remaining term, its renewal history, whether the customer can terminate without cause, whether assignment needs consent, and whether the relationship belongs to the business or to the owner personally. A business earning most of its money from maintenance and repeat service is valued like a recurring-revenue business; one whose year rests on two builders' pipelines is valued closer to a contractor with an order book, and its earnings are harder to call maintainable. The evidence that separates them:
- ·Revenue by type (reactive, maintenance, project) and by customer for three years, from the job-management system, reconciled to the accounts
- ·Every maintenance agreement: term, renewal date, pricing and indexation, termination and assignment clauses, and who holds the relationship
- ·Customer concentration, and how long the largest customers have stayed
- ·Project work: work-in-progress schedule, retentions and release dates, aged debtors and disputed variations
- ·Chargeable hours by technician against the owner's own
- ·Employed versus subcontracted labour, and whether the subcontractors would stay
Owner-operators, small teams and managed contractors
Published guides price both trades by size and structure. A sole operator with a van sits at the bottom of the range: much of the value is the plant and the owner's own labour, because a buyer is largely buying a job. A small team of licensed staff is priced on EBITDA after a wage for the owner, and the question becomes whether the owner is chargeable on the tools or genuinely managing. A managed contractor with office staff, written systems and a maintenance book is quoted in the upper half of the band, because the earnings no longer need the owner. Commercial and specialist contractors are sometimes quoted above the general band but carry their own risks: long tender cycles, insurance and prequalification requirements, and dependence on a few large customers. The trades also differ in detail: plumbing often combines plumbing, drainage and gas work, each of which may need its own licence or class, while the Queensland and Victorian electrical regimes above separate technical and business roles.
Vehicles, tools, the workshop and the other standing deductions
Vehicles are the largest physical asset and the easiest to misprice. EBITDA ignores what it costs to keep a fitted-out fleet on the road, so a valuer compares the age, kilometres and condition of each vehicle with a normal replacement cycle and deducts the shortfall, whatever the depreciation schedule shows. Vehicles under finance or lease are obligations the buyer either assumes or does not. Tools, test equipment and trailers need the same register, not a book value. Be clear which basis a price is quoted on. Some guides present a goodwill multiple with vehicles and stock added at market value on top; an enterprise-value multiple already includes the plant needed to earn the earnings, and adding the plant again double counts it. Other standing items are typical of the sector: a workshop or yard let by the owner or a related entity at other than market rent, which changes the earnings; accrued employee leave, which follows the team to the buyer or is paid out by the seller; and warranty callbacks and defect claims on recent work. Debtors, retentions and stock are working capital, settled separately from the price.
A worked example: from reported profit to a supportable range
Consider a hypothetical plumbing business with turnover of $1,800,000, four employed plumbers and two apprentices. The owner holds the company's licence nomination, quotes every job and works on the tools two days a week. Written maintenance agreements provide $450,000 of turnover (25 per cent) and the largest builder customer $270,000 (15 per cent). Reported profit before tax is $250,000, after $48,000 of depreciation, $12,000 of interest and $95,000 of pay to the owner. Adding back interest and depreciation gives EBITDA of $310,000; adding back the owner's actual pay and $10,000 of private expenses gives $415,000. A licensed supervising plumber who could take over the nominee role and the management would cost $140,000 including superannuation, and the workshop, owned by the owner's family trust, is let to the business at $12,000 a year below market rent. Deducting both leaves normalised EBITDA of $263,000. At 2.5 to 3.0 times, an assumed multiple inside the band quoted above, the earnings support $657,500 to $789,000. Three of the five vehicles are near the end of their working life, and a buyer would deduct an assumed $100,000 for replacement spending beyond a normal cycle (the multiple already allows for the normal cycle), leaving $557,500 to $689,000 before any working capital adjustment. With no maintenance agreements, nobody but the owner able to hold the nominee role and a year resting on two builders, the same business would sit near the bottom of the band or below it. Every figure here is illustrative, not a benchmark.
What a defensible plumbing or electrical valuation file contains
The band is wide, so the supportable position is won in the evidence. The conclusion is a range with the most supportable point concluded within it, and the file behind it typically holds:
- ·Three years of financial statements and year-to-date management accounts, reconciled to business activity statements and bank statements
- ·A normalisation schedule with evidence for each adjustment: the owner's actual pay and hours on the tools, the market cost of a licensed replacement, related-party rent, private expenses and one-off items
- ·A licence schedule: the company licence and class, every nominee, qualified supervisor or technical person, their employment terms, and the regulator's public register entry for each
- ·Revenue by type and by customer, with every maintenance agreement and its renewal, termination and assignment terms
- ·Work in progress, retentions, aged debtors and open variations on project work
- ·A fleet and tools register with ages, kilometres, finance and condition, and the timing of the next replacements
- ·The workshop or yard lease or related-party arrangement, insurance claims, warranty callbacks and any regulator correspondence
- ·Expense ratios cross-checked against the ATO's published small business benchmarks for plumbing services or electrical services (2023-24: total expenses of 75 to 86 per cent of turnover for plumbing above $600,000 and electrical above $500,000). Falling outside the range is a prompt to check that all income and private stock use are captured, not a conclusion
- ·Comparable transactions where they exist, and a sensitivity across the supportable multiple range
When the number has consequences
A formal valuation is worth commissioning once the number has consequences that someone else can test: a sale to a larger contractor, a buy-in or sale to a long-serving employee, a partner or shareholder exit, a family law property settlement, or a tax event such as a small business CGT concession claim under Division 152 of the ITAA 1997, which carries a $6 million maximum net asset value test. In those settings the standard is market value as described in Spencer v Commonwealth (1907) and in the ATO's 'Market valuation for tax purposes' guidance, and the evidence behind the number matters more than the number itself. Oliver Group prepares independent valuations only. It is not a tax agent and does not give tax, legal or financial advice, so your accountant and lawyer apply the valuation in their own fields. Reports follow the guidelines of APES 225 Valuation Services. Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $10 million, and a Large Business / Start-Up Valuation is $3,495 + GST for turnover over $10 million or for a start-up. A small-business draft is delivered in 2 business days and a medium-business draft in 3 business days; the delivery date for a Large Business / Start-Up Valuation is agreed before commencement. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before work begins and never depends on the concluded value.