Every offer for your shop is built on one figure: EBITDA — earnings before interest, taxes, depreciation, and amortization. It’s your true operating profit, stripped of financing and accounting noise. A buyer works it out in minutes. Most owners guess it wrong, usually low, and find out what that cost them at the worst possible moment.
How to work out yours
Start with net profit, the bottom line on your P&L. Then add back:
Interest — loan and financing costs
Taxes — income taxes the business paid
Depreciation and amortization — the non-cash write-down of trucks, equipment and goodwill
That’s EBITDA.
Then adjust it. This is where owners undercount.
Buyers value adjusted EBITDA. Add back the owner-specific and one-off costs a new owner would not carry:
Your own above-market salary and owner draws
Personal expenses run through the business — vehicle, travel, phone
One-time costs — a lawsuit, a bad-debt write-off, a one-off repair
Rent you pay yourself above market. Below-market rent goes the other way, as a subtraction.
Document every add-back. A buyer will make you prove each one.
What it’s worth
2026 trades multiples, from CT Acquisitions’ home-services roll-up tracker:
Platform-quality shops, over $2M EBITDA: 6 to 11 times EBITDA
Smaller tuck-ins, under $2M EBITDA: 3 to 8 times EBITDA
Adjusted EBITDA of $800k at 5x is $4.0M. The same shop at 7x is $5.6M. That two-turn swing — $1.6M — is decided by how clean and defensible your numbers are, not by luck.
What to do with the number
Know your floor, the low-end multiple, before a single buyer calls.
The fastest way to lift the multiple isn’t more revenue. It’s cleaner books, recurring revenue from service agreements, and less owner-dependence.
Recalculate every quarter. The number moves.
This is a framework, not financial or tax advice. Confirm with your accountant before acting on any offer.
The Callout — the business brief for the trades. One brief, most mornings, about three minutes long.