For years, small business owners in trades like plumbing, HVAC, and other service industries may have felt overlooked in conversations about high-value business sales. But the rise of private equity interest in these fields is changing the game. Today, more small business owners are finding lucrative opportunities to sell, proving that value exists in every industry.
Why Private Equity Is Turning to Trades
Private equity firms, once heavily focused on industries like technology and healthcare, are increasingly looking to businesses in skilled trades and services. Here’s why:
1. Reliable Revenue Streams: Businesses like plumbing and HVAC often benefit from recurring revenue, such as service contracts and maintenance agreements, which provide a stable cash flow.
2. Essential Nature of Services: These industries provide critical services that are always in demand, regardless of broader economic cycles.
3. Market Fragmentation: Many service industries are made up of smaller, localized operators, presenting opportunities for consolidation and scaling under private equity ownership.
Building Value Beyond High-Tech Industries
The growing private equity interest in trades serves as a reminder: valuable businesses aren’t limited to technology or cutting-edge industries. Skilled trades and service-based businesses can offer the stability, scalability, and market opportunity that investors look for.
Entrepreneurs in these industries often spend decades building reliable businesses with loyal customer bases, steady revenue, and operational efficiency. These qualities are increasingly being recognized by private equity as a foundation for long-term growth.
Preparing for an Exit
If you’re considering selling your small business, there are steps you can take to position yourself for a successful exit:
1. Organize Financials: Ensure your books are clean, detailed, and up to date. Buyers want transparency and reliability in financial records.
2. Systematize Operations: Document key processes, from client onboarding to service delivery. Buyers value businesses that can run smoothly without heavy involvement from the owner.
3. Highlight Growth Potential: Whether through expanding into new markets, increasing service offerings, or improving efficiency, show buyers where the opportunities lie.
A New Chapter for Small Business Owners
Private equity’s focus on service industries highlights a shift in the market. Entrepreneurs who have spent years building businesses in plumbing, HVAC, or other skilled trades are now finding opportunities to sell at attractive valuations. These deals reflect the growing recognition of the hard work and operational strength required to succeed in these fields.
If you’re preparing for a sale, having the right guidance is critical. At Recalde Law Firm, P.A., we specialize in helping small business owners navigate the complexities of the sales process, from structuring the deal to negotiating terms.
Thinking about selling your small business? Let’s talk.
