Plumbing Business Valuation Calculator

This Plumbing Business Valuation Calculator allows you to estimate the financial worth or value of your service business by inputting key metrics like annual revenue, number of employees, average revenue per customer, and growth rate.

What is a plumbing business valuation calculator?

A plumbing business valuation calculator is an online tool that helps you estimate the financial worth or value of your business. By inputting just a few key details like annual revenue, number of employees, average revenue per customer, and growth rate, you can get a clear picture of your business’s value based on important financial metrics and performance indicators.

Who uses a plumbing business valuation calculator?

This tool is versatile and used by many people in the plumbing industry, including business owners, analysts, investors, and lenders. A plumbing business valuation calculator helps assess the value and performance of plumbing businesses and support decision-making. Business owners use it to plan strategies, analysts to evaluate viability, investors to spot opportunities, and lenders to determine loan terms. It’s an invaluable resource for boosting the worth of your plumbing business.

What information is included in a business valuation calculator?

To use a business valuation calculator, you’ll need to have the following information on hand:

1. Annual Overhead: The total ongoing expenses of operating your business.
2. Number of Team Members: The total number of plumbers on your payroll.
3. Average Holidays per Team Member per Year: The average number of holiday days each plumber on your team takes annually.
4. Average Vacation Days per Team Member per Year: The average number of vacation days each plumber on your team takes annually.
5. Average Billable Hour Efficiency: The percentage of total work hours that are billable.
6. Average Hourly Rate per Team Member: The average wage you pay each plumber on your team per hour.
7. Desired Net Profit: Your profit margin goal, represented as a percentage of sales.

Formulas Used in the Plumbing Business Valuation Calculator:

1. Gross Profit
GP = AR − COS
Where:
– GP is the Gross Profit.
– AR is Annual Revenue.
– COS is Cost of Sales.

2. Net Profit
Net Profit = Gross Profit – (Overhead Expenses + Cost of Technician + Cost of Office Staff)
where:
Cost of Technician = (How many technicians work at your company * Avg. monthly salary of a technician) * 12
Cost of Technician = (How many office staff work at your company * Avg. monthly Salary of an office staff) * 12

3. Estimated Business Valuation
Estimated Company Value = (Net Profit + Total value of company’s assets)* Company valuation multiplier

Example of How to Calculate Business Valuation:

Annual Revenue (AR): $1,000,000
Cost of Sales Last Year (COS): $400,000
Overhead Expenses (OE): $200,000
Total Value of Company’s Assets (VA): $300,000
Company valuation multiplier (M): 5
How many technicians work at your company: 5
Avg. monthly salary of a technician: 2,000
How many office staff work at your company: 5
Avg. monthly Salary of an office staff: 1,000

Calculations:
1. Gross Profit (GP)
GP = $1,000,000 – $400,000 = $600,000

2. Net Profit
Net Profit = $600,000 – ($200,000 + $120,000 + $60,000) = $220,000

3. Estimated Business Value
Estimated Business Value = ($220,000 + $300,000) * 5 = $2,600,000