What is my HVAC company worth?

Our HVAC business valuation calculator builds your range in four steps. Every step is written up on our methodology page.

1. Your earnings. We start with last year's net profit and add back your own pay, loan interest and depreciation. That is your seller's discretionary earnings (SDE): what one full-time owner takes home before paying themselves. Then we add the personal and one-time costs you list, such as a spouse's above-market pay, a personal truck or the A2L recovery machine you bought once. Buyers test every add-back, so we accept less of the ones you cannot document. The HVAC add-backs checklist and the add-back finder help you find them.

2. Which number buyers will use. If the business still needs you in the field or on every sale, buyers price it on SDE. If a manager runs the day, they subtract a market salary for that manager and price adjusted EBITDA instead. For a shop over $7.5M in revenue we assume about $150,000 before benefits, our estimate set above the BLS national median of $101,280 for general and operations managers. Below about $500K of adjusted EBITDA we use SDE, above $1M we use EBITDA, and in between we blend the two so a small change in profit cannot swing your value by half a million dollars.

3. The base multiple. For owner-run shops our middle band follows BizBuySell's sold HVAC deals: lower quartile 1.99x, median 2.58x, upper quartile 3.33x SDE. For managed companies we use an illustrative EBITDA band built from Next Era Legal's 4.0x to 6.5x for $500K to $2M of EBITDA and Axial's letters of intent for larger shops. First Page Sage reports higher figures, but its sample leans to advisor-led deals, so we treat those numbers as the top of the range.

4. Adjustments. Your answers move the multiple up or down. The biggest HVAC moves are owner dependence, maintenance members and renewal, residential vs commercial mix, new construction share and who holds the license. For example, we estimate a strong maintenance program adds 0.25x to 0.75x SDE compared with none, and an 85% or better renewal rate on automatic billing adds a little more. Monthly auto-billed plans renew at 90% to 95% in one vendor's benchmarks. Every adjustment size is our estimate, capped so no single answer can run away with the result. See what makes an HVAC company worth more.

You get a low, likely and high value, the basis we used, and the three answers costing you the most. The sample below is a made-up Phoenix company with $11.8M in revenue, so the numbers are large; most owners will see a smaller range.

Most HVAC owners hear two kinds of numbers and assume one of them is wrong. Both can be right, for different companies.

The SDE number is what an individual buyer, often with an SBA loan, pays for a business they will run themselves. It counts your full pay as profit, because the buyer is stepping into your boots. BizBuySell's sold HVAC deals cluster around 2.58x SDE.

The EBITDA number is what a private equity platform or a larger competitor pays for a company that runs without its owner. It subtracts the cost of a manager first, so the earnings figure is smaller, but the multiple is bigger: 4.0x to 6.5x for $500K to $2M of EBITDA, per Next Era Legal.

You are likely on the SDE side if you run dispatch, sell most replacements or are the only license holder. You are moving to the EBITDA side when a service manager and install manager run the day, your member count and renewal rate are tracked, and adjusted EBITDA is heading toward $1M. Our calculator tells you which side it used and why. The jump between the two is the biggest single move in HVAC value, and it is mostly about people, not equipment.