A lot of folks think only fast-growing tech companies or big brands grab buyers’ attention. That’s just not true. These days, plenty of buyers and investors are looking for solid, steady businesses—like HVAC, plumbing, or manufacturing companies. If you own a business in one of these areas, your hard work could be worth more than you realize.

Knowing what your business could sell for is the first step to planning your next move. In this article, we’ll talk about why buyers love stable industries, how business values are usually determined (in plain English!), and why it’s smart to start thinking ahead about when you might want to sell.

Why Buyers Like Reliable Businesses

If you talk to most folks looking to buy a business, they’ll tell you the same thing: they’re looking for steady profits and work that won’t dry up overnight. That’s why industries providing services everyone needs—no matter what—are in high demand.

HVAC & Plumbing: Always Needed

No one can put off getting their heat fixed in the middle of winter, or ignore a burst pipe. HVAC and plumbing businesses aren’t trendy—they’re essential. People need these services every single day, which means steady calls and predictable income. That steady demand is a real draw for buyers. Many will buy several companies in one region and pull them together, making it easier to run, get better deals from suppliers, and cover a bigger area.

Manufacturing & Industrial Services: The Backbone

Same story with specialty manufacturers and service providers. Whether you make parts for other businesses or handle big maintenance jobs, your customers depend on you. Good relationships, years of experience, and know-how set your business apart and can be hard for newcomers to match. To a buyer, a well-run manufacturing or service company means regular revenue and customers that keep coming back.

How Buyers Value Your Business (No Fancy Terms Needed)

When someone’s thinking about buying your business, they aren’t just looking at your tools or the trucks in the yard. What really matters is how much money your company makes—and how much it can make in the future. That’s where business value comes from.

What’s This “Multiple” Thing All About?

You’ll hear people talk about “multiples.” All that means is buyers will look at how much your business earns in a year, and then multiply that by a certain number to figure out what they think it’s worth.

The number they use is usually based on your earnings before things like loans, taxes, or equipment wear and tear. This boils down to the money your business brings in from its regular operations.

Here’s How it Works

Let’s say your business makes $2 million a year before all that other stuff. If buyers in your industry usually use a “multiple” of 6, then:

$2,000,000 x 6 = $12,000,000

So, somebody might be willing to pay around twelve million for your company. The number they pick isn’t random. Here’s what affects it:

● Industry:
Businesses like yours—steady, always needed—tend to get higher offers.

● Growth:
If your sales are growing, buyers pay more.

● Profits:
Higher profit means a better number.

● Customers:
Lots of different customers (not just one or two big ones) is a plus.

● Team:
If your crew can keep things running without you, that’s a big bonus.

● Market:
What’s happening in the economy matters too—if it’s a good time to sell, offers go up.

Knowing your yearly earnings and the usual “multiple” for your type of business helps you get a ballpark idea of what you could sell for.

Why Timing Matters When You Sell

Selling your business is a big deal. Lots of owners wait too long—maybe until they’re worn out or ready to retire. Sometimes that means missing out on the best price. Thinking ahead can make a huge difference.

Sell When Things Are Going Well

The best time to sell is when you don’t need to. If business is booming, profits are strong, and sales keep climbing, buyers will pay more. If things start to slow down or you lose a big client, you may have to accept less.

Watch the Market

Just like the housing market, the business buying-and-selling world has good times and bad times. When the economy’s strong and more buyers are looking, business values can go up. Keeping an eye on the bigger picture helps you pick a better time to make your move.

Plan Several Years Ahead

A good exit doesn’t happen overnight. If you give yourself three to five years, you can fix up your finances, train your team to work without you, and make improvements that boost your bottom line. That puts you in the driver’s seat—you choose the time, the buyer, and (more often than not) a better price.

Ready to See What You’re Worth?

Thinking about your business’s future is never easy, but having the right info helps. Buyers love stable, well-run companies, and understanding how they look at value—and why timing matters—puts you a step ahead.

If you’re curious what your business might fetch these days, it’s a great idea to talk to folks who know the ropes. A good advisor can give you a better sense of your company’s value and help you get ready, whenever you decide the time is right.

You know your business like the back of your hand. You know the cost of every part, the time it takes for every job, and the name of every long-term customer. But what about the things happening outside your shop or warehouse? The wider economy, shifts in your industry, and even what’s happening on Wall Street can have a real impact on what your business is worth.

Understanding how these big-picture changes affect your company’s value is crucial, especially when you start thinking about selling. You might be an expert plumber or a top-notch manufacturer, but a professional small business valuation looks at more than just your day-to-day operations. It considers the world around your business.

This article will break down how market changes can raise or lower what your business is worth, using real-world examples that make sense for owners in trades like HVAC, plumbing, and distribution.

What is a Business Valuation and Why Does it Change?

Think of your business's value like the price of a house. The house itself—its size, condition, and features—is the biggest factor. But the neighborhood it's in, the local job market, and the overall housing market also play a huge role. If new jobs are coming to town and lots of people want to move in, your house is worth more. If a major local employer shuts down, its value might drop, even if you just renovated the kitchen.

A small business valuation works the same way. The value is based on your profits, your team, and your equipment. But it’s also influenced by external market forces. A buyer isn't just buying your past success; they're betting on its future success. And that future is tied to the world around it.

1. The Overall Economy: Interest Rates and Recessions

The health of the national economy is one of the biggest factors influencing your business's value. When the economy is strong, people and companies have more money to spend, and it’s easier for buyers to get loans.

Interest Rates

When the government raises interest rates to fight inflation, it becomes more expensive for anyone to borrow money. This directly affects potential buyers of your business. If a buyer needs a loan to purchase your manufacturing company, a higher interest rate means their monthly payments will be larger. This reduces how much they can afford to pay you for the business.

● Example:
Imagine a buyer was approved to borrow $2 million to buy your distribution business when interest rates were 4%. A year later, rates are at 7%. That same monthly payment might now only get them a loan for $1.6 million. Because their borrowing power is lower, their offer for your business will likely be lower, too.

Recessions and Economic Downturns

During a recession, customers tighten their belts. For an HVAC company, this might mean more people choose to repair their old AC unit instead of replacing it. For a light manufacturing business, it could mean your clients order smaller batches of parts. If your sales and profits dip because of a recession, your valuation will likely follow.

However, some businesses, like plumbing and HVAC repair services, are considered "recession-resistant." People can’t put off fixing a burst pipe or a broken furnace. If you can show a buyer that your business performs well even when the economy is slow, it can make your company even more attractive and valuable.

2. Industry-Specific Trends and Changes

Every industry goes through its own cycles of change. New technologies, government regulations, and shifting customer demands can all have a major impact. Staying on top of these trends is key.

Technology Shifts

New technology can be both a threat and an opportunity. For example, the rise of smart home technology and energy-efficient systems has been a huge boost for modern HVAC and plumbing businesses. If your company has experience installing these systems, it adds to your value. If you’ve ignored these trends, a buyer might see your business as outdated and factor in the cost of catching up.

● Example:
A plumbing business that specializes in installing high-efficiency tankless water heaters and smart leak-detection systems is more valuable than a competitor that only offers traditional services. The forward-looking business is better positioned for future growth.

Government Regulations

New laws can create instant demand. Think about government incentives for green energy. When tax credits are offered for installing heat pumps or high-efficiency furnaces, demand for those services skyrockets. If your business is ready to meet that demand, your revenue—and your valuation—will climb. On the flip side, new environmental or safety regulations could require expensive equipment upgrades, which a buyer would view as a future cost.

3. The M&A Market: Buyer and Seller Demand

"M&A" stands for mergers and acquisitions. It’s just a fancy term for the market of buying and selling companies. Like any market, it’s all about supply and demand.

Buyer Demand

Sometimes, there’s a flood of money looking for good businesses to buy. This happens when private investors, family offices, or larger companies are eager to expand. When lots of buyers are competing for a limited number of solid businesses, prices go up.

Right now, industries like HVAC, plumbing, and other home services are very popular with investors. They like the steady, predictable revenue from service contracts and the fact that the work can't be outsourced. If you own a business in a "hot" sector, you’re in a great position to command a higher price.

Seller Supply

Conversely, if a lot of owners in your industry decide to sell at the same time—perhaps a wave of baby boomers is retiring—the increased supply can give buyers more options and potentially drive prices down. Timing your sale when demand is high and supply is reasonable can make a significant difference.

How to Protect Your Valuation from Market Swings

You can’t control interest rates or prevent a recession, but you aren’t helpless. You can take steps to make your business as strong and attractive as possible, no matter what the market is doing.

● Focus on Profitability:
Consistent, predictable profits are the #1 driver of value. Keep your operations lean and your pricing smart.

● Build Recurring Revenue:
Service agreements for HVAC maintenance or regular supply contracts in manufacturing are like gold to a buyer. This shows stable income that isn't dependent on constantly finding new one-off jobs.

● Stay Current:
Keep an eye on industry trends. Invest in new training and technology that will keep your business relevant for the next decade, not just the next year.

● Get Professional Guidance:
Don't guess what your business is worth. Professional business evaluation services can give you a realistic picture of your company’s value today and help you identify areas for improvement.

Take Control of Your Business’s Future

Market conditions will always change, but a great business is always a great business. By understanding how external factors can affect your company’s value, you can make smarter strategic decisions and be better prepared for an eventual sale. Getting a professional small business valuation is the first step in understanding where you stand and how you can work toward a successful exit.

If you own a business in the HVAC, plumbing, manufacturing, or distribution industries, it's never too early to start planning. We can provide a confidential, no-pressure evaluation of your business and help you understand how to maximize its value. Reach out today to start the conversation about securing your legacy.

Notice: For general educational and informational purposes only; not to be relied upon as financial, tax, or legal advice. Financial decisions carry inherent legal, tax, and other risks. Past performance is not a guarantee of future results. Use of this content creates no relationship with us, and we are not liable for any losses or damages from your use of this information. ANY WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED. You use this content at your own risk.

What Stable Businesses Are Worth to Buyers Today