Service businessNov 5
Mechanical Engineering Design Firm
Architects and contractors in one southeastern metro hire this firm to design ventilation, plumbing and piping systems, and nearly all its work arrives by word of mouth.
- Ask
- $895K
- Profit
- $287K
- Multiple
- 3.1x
- Ask
- $895K
- Revenue
- $490K
- Profit
- $287K
- Margin
- 59%
- Multiple
- 3.1x
- Age
- ~29 yrs (1997)
How it rates
ValuationFair
Other online service businesses we've tracked mostly ask 2.8–4.5x profit, or 2.8–4.7x adjusted for its long, steady record and the owner's workload; this one asks 3.1x.
Durability
29 years old, revenue growing, with 20 to 30 active clients and about 80% repeat work.
Hands-off
The owner works about 50 hours a week, leading all design work and handling client relationships.
Why it's interesting
- SBA pre-qualified with 10% down on a 10-year loan, and the owner offers up to two years of transition support.
- It takes on 60 to 100 projects a year at about $7,500 each, billed by fixed fee or $250 an hour, with about $150,000 of contracted work in hand.
- A part-time administrator and two part-time licensed engineers already support the work, and team members have been with the firm about 8 and 3 years.
- The seller says there are no one-time expenses or owner perks added back, books are kept with an outside accounting firm, and the firm has never faced a claim or lawsuit.
What to watch
- The owner leads all design work and handles client relationships, so some of the repeat work may follow the owner rather than the firm.
- State rules require a licensed engineer on-site at least two hours a week and the work includes site visits, so a buyer likely needs to live nearby or hire locally.
- The listing describes three years of revenue growth but gives no yearly figures, and the largest client's share isn't stated.
Ask the seller
- Would either part-time engineer take over design leadership, and are they willing to stay on full-time?
- What share of revenue did the top five clients bring in last year?
- Can a buyer without an engineering licence own the firm in all four states where it's registered?
Growth plays
- Hire an electrical engineer so the firm can deliver full mechanical, electrical and plumbing packages that architects now split between firms.
- Bid for industrial design work in the three other states where it's already registered, building on its recent shift toward industrial projects.
Nov 5Added to Acumen Wire