Business Valuation Report
Executive Summary
Sunrise Plumbing & Drain LLC is a 14-year-old residential and small-commercial plumbing service business operating throughout the Las Vegas metro. The business serves approximately 1,400 active customers, generated $2.84M in 2025 revenue, and produces a weighted Seller's Discretionary Earnings (SDE) of $631,950.
Based on industry-standard SDE multiples for owner-operated trade businesses with strong recurring revenue and established local brand, the indicated value range is $1.77M – $2.59M, with a base-case opinion of value at $2.21M.
SDE Reconstruction
Seller's Discretionary Earnings (SDE) is the primary valuation metric for owner-operated businesses in this size range. It captures the total economic benefit available to a single owner-operator after normalizing for owner compensation, perks run through the business, and one-time expenses.
| Year | Revenue | Net Income | Add-Backs | SDE |
|---|---|---|---|---|
| 2023 | $2,420,000 | $268,000 | $284,500 | $552,500 |
| 2024 | $2,690,000 | $305,000 | $298,200 | $603,200 |
| 2025 | $2,840,000 | $364,000 | $321,000 | $685,000 |
| Weighted SDE | 50% / 30% / 20% | $631,950 | ||
Add-Back Components
- Owner compensation (above-market): $128,000
- Owner health insurance: $19,200
- Owner vehicle expenses: $24,800
- Depreciation & amortization: $86,000
- One-time expenses (2025 office relocation): $18,000
- Personal expenses through business: $45,000
Multiple Analysis
Comparable transaction data for plumbing service businesses with $2–4M in revenue and similar SDE profiles trades in the 3.0×–4.5× range, with premium multiples reserved for businesses with proven systems, reduced owner dependency, and recurring revenue contracts. Sunrise Plumbing's recurring residential service base (60% of revenue) and 4.8-star Google rating support a multiple at the upper end of the standard range; the moderate owner involvement (52 hrs/week, owner runs estimating) caps the multiple short of premium territory.
| Scenario | Multiple | Indicated Value | Reasoning |
|---|---|---|---|
| Conservative | 2.8× | $1,769,000 | Quick sale, limited buyer pool, full-price-to-market test |
| Base Case | 3.5× | $2,212,000 | Standard local-buyer process, properly marketed |
| Optimistic | 4.1× | $2,591,000 | Strategic buyer (regional roll-up) with synergy potential |
SBA Financing Snapshot
At the base-case purchase price of $2,212,000, a typical SBA 7(a) acquisition loan would require approximately 10–15% buyer equity ($221K–$332K), with the balance financed over 10 years at current rates of approximately 10.75%. Estimated monthly debt service is $25,400–$26,800, well within the SDE coverage ratio lenders require (~1.25× minimum). Personal goodwill considerations and the owner's planned transition timeline will materially impact what an SBA lender approves.
Key Caveats
This Snapshot Valuation reflects a self-reported, conversation-based assessment. It does not constitute a formal USPAP-compliant business appraisal. Buyers, attorneys, and SBA lenders will require additional due diligence including: tax returns, P&L review, customer concentration analysis, and a normalized financial reconstruction.
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