Trades and home services businesses — HVAC, plumbing, electrical, roofing, handyman, garage doors, pest control — sell work people need whether or not the economy is busy. They are also more regulated than most small businesses, and depend heavily on skilled people. Here is what to look at, alongside our general due-diligence checklist.
1. The licence — check this first
- Many states and cities license HVAC, plumbing, electrical and other contractors, and in many places the licence is held by a person (a "qualifier"), not by the company. If that person is the seller, ask how the business will stay licensed after they leave.
- Options include holding the licence yourself, hiring a licensed qualifier, or the seller staying on for a while — your state's licensing board has the rules.
- Also check permits in progress, and any complaints or actions on the licensing board's record.
2. Where the revenue comes from
- Service and repair: call-outs when something breaks — busy in hot and cold spells in HVAC.
- Maintenance agreements: customers who pay every year or month for regular servicing. They bring steady revenue and repeat work, and buyers value them. Ask how many there are, what they pay, and how many renew.
- Installation and replacement: larger jobs, often from service customers. Look at the average job size and how work is quoted.
- Commercial and builder work: contracts with property managers, businesses or builders. Ask about payment terms and whether the contracts can be transferred.
3. Technicians
- How many technicians and installers there are, their licences and certifications, what they are paid, and how long they have stayed. Skilled technicians are hard to hire, so keeping them matters.
- Who answers the phone, books jobs and orders parts.
- How much of the field work and the selling the owner does personally.
4. Vehicles, tools and stock
- A list of vans or trucks with mileage and condition, any loans or leases, and the tools and equipment in each.
- Parts and stock on hand — usually counted at closing and added to the price, or left out; agree which.
- Supplier accounts and any distributor or brand dealer agreements, and whether they move to you.
5. Warranties and call-backs
- Labor warranties the business has given on past work — who pays for a call-back on a job done before you owned it? Put the answer in the purchase agreement.
- Any open complaints, claims or disputes.
6. Insurance
- General liability, commercial auto and workers' compensation where there are employees; some states and customers also require a contractor's bond.
- The claims history for the last few years.
7. Marketing and systems
- How customers find the business (reviews, referrals, ads, home-warranty companies) and what it costs each month.
- The phone number, website, reviews and the scheduling / dispatch software — make sure they move to you.
8. Price and paying for it
- Trades businesses are usually priced on their yearly earnings, plus or including the vehicles and equipment — see how a small business is valued and try our free valuation (with a free account).
- The SBA 7(a) loan program can be used to buy an existing business — see sba.gov. Some sellers will carry part of the price.
- Agree a handover period, introductions to key customers and suppliers, and a non-compete.
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General information, not legal, tax or financial advice. Last updated October 13, 2026.