What does it cost to buy a home services company?
The short answer: about $930,000 for the business below, with roughly $158,000 cash to close. The longer answer is the lender's math — and it's worth running before you agree on a price.
The short answer
This is a modeled 8-technician home services company, built from researched benchmarks — not a listing, and not a promise about any specific business. The numbers come from the free Parallel Space acquisition calculator's home-services preset.
| Figure | Amount |
|---|---|
| Year-1 revenue | $1,870,000 |
| EBITDA (19% margin) | $355,300 |
| Seller's discretionary earnings (SDE) | $355,300 |
| Purchase price (2.61× SDE) | $930,000 |
| Cash to close (15% equity + 2% closing costs) | ≈ $158,000 |
| Acquisition loan (85% of price) | $790,500 |
| Annual debt service (10%, 10 years) | ≈ $125,000 |
| Seller DSCR | ≈ 2.83× |
Three sizes of the same business, modeled from the calculator's home-services preset — 2, 8, and 20 technicians. The pattern to notice: as the company grows, the margin thins and the multiple rises. A 2-tech shop is the owner doing the work; a 20-tech firm is priced more like a company than a job.
| Figure | 2 techs | 8 techs | 20 techs |
|---|---|---|---|
| Year-1 revenue | $425,000 | $1,870,000 | $4,675,000 |
| Revenue per tech | $212,500 | $233,750 | $233,750 |
| EBITDA / SDE | $148,750 (35%) | $355,300 (19%) | $841,500 (18%) |
| EBITDA per tech | $74,375 | $44,413 | $42,075 |
| Purchase price | $370,000 (2.5× SDE) | $930,000 (2.61× SDE) | $3,370,000 (4.0× SDE) |
| Cash to close (15% equity + 2% closing costs) | $62,900 | $158,100 | $572,900 |
| Acquisition loan (85% of price) | $314,500 | $790,500 | $2,864,500 |
| Annual debt service (10%, 10 years) | ≈ $49,874 | ≈ $125,358 | ≈ $454,255 |
| DSCR | 2.98× | 2.83× | 1.85× |
Prices are the calculator's defaults, rounded to the nearest $10,000. The 2-tech price is 2.5× SDE — $148,750 × 2.5 is $371,875, rounded to $370,000. The 8-tech price is 2.61× SDE — $355,300 × 2.61 is $927,333, rounded to $930,000.
For context: a typical mixed-trade home services company runs 17–21% EBITDA (BizBuySell sold average). The modeled business above is a good operator at 19% — 8 technicians, 2.2 jobs per tech per day, a $425 average ticket, 250 service days.
How the price is set
The price is 2.61× SDE — the BizBuySell sold average for home services companies. SDE, seller's discretionary earnings, is the cash the business throws off for its owner: EBITDA plus the owner's compensation and add-backs. At the calculator's defaults the owner's labor is already inside EBITDA, so SDE equals EBITDA here: $355,300 × 2.61 ≈ $930,000.
Why not a revenue multiple? Because revenue ignores margin. Two companies with the same $1.87M in sales can earn very different amounts — one at 19% margin, another at a much thinner margin — and buyers pay for earnings, not sales. The multiple follows the cash, not the top line.
The lender's math
Most buyers borrow most of the price. At 85% financing, the loan is $790,500. The rate is 10% — prime at 7.00% plus the 3.0% maximum spread for SBA 7(a) loans over $350K — over 10 years, which works out to about $125,000 a year in debt service.
Divide the earnings by the debt service and you get the debt-service coverage ratio: $355,300 ÷ $125,358 ≈ 2.83×. The SBA benchmark is 1.25×, so this deal clears it on the modeled numbers, with room to spare.
Read this carefully: under SBA SOP 50 10 8.1 (effective October 1, 2026), the 1.25× DSCR test runs on historical earnings — trailing tax returns, not your projection. The 2.83× above is a forward-looking model. It is a benchmark for judging the deal, not a pass/fail verdict from a lender. The lender will test the business's actual past earnings.
Cash to close is the other number that surprises buyers. At 15% equity ($139,500) plus 2% closing costs ($18,600), you need about $158,000 out of pocket — before working capital. SBA 7(a) requires at least 10% equity on a first-time acquisition, so 15% is a typical buyer contribution, not the floor.
What can go wrong
Add-backs that don't survive
Sellers often add back owner perks and one-time expenses to get to SDE. Lenders discount the ones they don't believe. Every dollar of add-back that falls out cuts SDE by a dollar — and at 2.61×, it cuts the price the math supports by $2.61.
The owner's own labor
If the owner still runs jobs, replacing them costs real money. The model above assumes the owner's labor is already inside EBITDA. Before you trust the $355,300, ask what a hired technician or manager would cost — and whether the earnings hold up after paying them. At the smallest size in the table below, the earnings are mostly the owner's own work: replacing the owner cuts SDE roughly in half.
Seasonality
Home-services demand swings by season — cooling calls peak in summer, exterior work concentrates in spring, and maintenance agreements smooth the rest. Annual averages hide the trough, and the trough is what tests your cash. Look at the monthly shape, not just the yearly total, and make sure the slow months still cover the loan payment.
Frequently asked questions
How much cash do I need to buy a home services company?
On a $930K price, about $158,000 at 15% equity plus 2% closing costs — before working capital. The SBA minimum is 10% equity, so the floor is lower, but 15% is what a typical buyer puts in.
What DSCR does an SBA lender require?
1.25×, tested on historical earnings under SOP 50 10 8.1. A modeled DSCR above 1.25× is encouraging, but it is not the test — the lender looks at trailing earnings, not your forecast.
Why 2.61× SDE instead of a revenue multiple?
Because buyers pay for earnings. A revenue multiple treats a 19%-margin company and a thin-margin company as the same business. The SDE multiple prices the cash the business actually produces.
Is the calculator really free?
Yes. The acquisition calculator is free to use, with 19 industry presets and the same lender math shown on this page. There is a $49 full 10-year Excel model for home services if you want the complete workbook.
Run your own home-services deal — free
Change the price, the loan terms, the add-backs, the season shape — and see what the lender's math says about your deal.
Open the free home-services calculatorWant the full 10-year workbook? The home-services acquisition model is $49 on Gumroad.
Want a custom model built for your deal? David offers custom model builds, valuations, and FP&A advisory on Contra.