Selling an Electrical Services Business
Based on hundreds of real buyer-seller diligence calls we’ve helped happen on Rejigg, these are the electrical-specific topics that move price and terms fast: permit and qualifier continuity, job-cost accuracy, change-order discipline, retainage cash, and whether the shop runs without you.
What buyers ask and how to be ready
Each topic below comes from real buyer-seller conversations. Here's what they ask, what they're really evaluating, and how to prepare.
License Coverage
Who can pull permits the week after closing?
Buyers are checking whether you can legally keep jobs moving on Day 1. They want to know who the qualifier is and what jurisdictions you can actually permit in, plus what the plan is if that person resigns, gets pulled into the field, or cannot qualify immediately after closing.
How to prepare
- List every city/county you pull permits in, the license tied to it, and renewal dates
- If you’re the qualifier, draft a written post-close qualifier agreement with term, pay, and expectations
- Document a realistic backup plan: an internal path to master or an external hire timeline
Great Answer
Our qualifier is Mike R., a W-2 employee, and he’s the master of record tied to the company license. We pull permits in 14 municipalities. Here’s the list with renewal dates and any local registrations. I’m only involved under a signed qualifier agreement for up to nine months while Mike completes the board and jurisdiction transfer steps.
Okay
We have a qualifying electrician, and permits have been fine. If needed, I can stay on short-term to help cover permits.
Gives Pause
I’m the qualifier, and we’ll figure it out after closing. Permits shouldn’t be a problem.
How Rejigg helps: Rejigg lets you share a license and jurisdiction summary under a digital NDA, then control when buyers see permit backups inside the data room. Learn more in the guide
Job Costing
How do you know job costs are real before the job is over?
They’re looking for proof your margins are repeatable across crews and project types. In electrical, the giveaway is whether you catch labor overruns and material miss-buys while the job is still running, and whether time and purchases get coded to the right job instead of dumped into a catch-all bucket.
How to prepare
- Pull 6–10 completed jobs showing estimate vs actual labor hours, material, and subs, with variance notes
- Write down your weekly job-cost review cadence and who owns fixes when labor goes sideways
- Clean up timecard and purchasing codes so jobs don’t get buried in “misc” or “shop”
Great Answer
Every Monday, we review active jobs and compare labor hours burned to the budget. If a job is off by more than 20 hours, the PM and the foreman explain the cause and what changes that week. Here are five completed jobs showing estimate vs actual, plus one job we lost money on and the bid and staging changes we made afterward.
Okay
We job cost in our system and review jobs as they go. We usually know when something starts slipping.
Gives Pause
We mainly find out at the end of the job whether we made money. The field codes time however they can.
How Rejigg helps: Rejigg’s data room is built for job-level proof like job cost reports and variance notes, so buyers can validate your margins without a messy email chain. Learn more in the guide
Change Orders
Do you get paid for scope creep, or do you eat it?
On fixed-price electrical work, change orders often decide whether a “good year” was real. Buyers want to see a field-to-office process that prices changes fast and actually collects, plus clear rules on written approval, safety exceptions, and what typically gets stuck with the GC.
How to prepare
- Build a change-order log for a recent job with dates: identified, priced, submitted, approved, billed, collected
- Set written approval thresholds, including when work pauses without sign-off
- Train foremen to flag scope changes same-day with photos and notes
Great Answer
Foremen flag scope changes the same day, the PM prices within 48 hours, and we submit weekly. If it’s over $2,500, we pause until we have written approval, except for safety items. On this TI (Tenant Improvement) project, we submitted $86k in change orders and collected $79k. The remaining balance is tied to specific GC approval steps we can point to.
Okay
We do change orders and try to stay on top of them. Most of the time, we get paid, but it can drag out.
Gives Pause
We usually just do the extra work and sort it out later. The GC knows we’re fair.
How Rejigg helps: You can stage a few clean change-order examples in Rejigg’s secure data room so serious buyers can verify discipline without seeing every contract on day one. Learn more in the guide
Cash Traps
Where does cash get stuck: retainage, disputes, or slow billing?
Electrical businesses often look fine on paper and still feel starved for cash. Buyers are trying to understand how much money is tied up in retainage, how disciplined your billing cycle is, and whether older receivables are explainable and collectible or just sitting there.
How to prepare
- Break retainage out from regular accounts receivable and show expected release timing
- Add a one-line note to each large past-due invoice: why it’s stuck and the next action
- Document billing cadence by work type and who owns the weekly collections follow-up
Great Answer
Retainage is usually 10% on TI and releases at substantial completion once closeout and lien waivers are submitted. Here’s our retainage schedule with expected release dates, plus the five largest past-due items with simple notes. Service is invoiced same day. TI is billed twice a month, and AR over 60 days is usually a missing change-order approval or a closeout package issue.
Okay
We have some retainage and a couple of slow-paying GCs, but it usually comes in. We bill regularly and follow up.
Gives Pause
AR is AR. Some customers just pay late, and there’s not much you can do about it.
How Rejigg helps: Rejigg helps you organize AR, retainage, and billing support in one buyer-ready data room and grant access in stages after NDAs are signed. Learn more in the guide
Backlog Quality
How do buyers evaluate backlog for an electrical contractor?
Buyers treat backlog as real only when it’s signed and buildable with your actual crews. They also pressure-test what can delay starts in electrical work, like permits, utility coordination, and long-lead items such as switchgear, panels, and gear deliveries.
How to prepare
- Build a backlog report with signed status, remaining value, start/finish dates, and crew needs
- Add one delay-risk note per job: gear lead time, inspections, GC schedule, utility coordination
- For service-heavy shops, summarize booked work and call volume trends instead of a construction-style backlog
Great Answer
Here’s our backlog by job with remaining value, start/finish dates, and whether it’s fully executed or PO-issued. We note the constraint on each job, like switchgear lead time or permit timing, so it’s clear what can slip. We do not include verbal awards, and the schedule is built around the foremen we actually have today.
Okay
We have a backlog list, and we’re busy for the next few months. Start dates move depending on other trades and materials.
Gives Pause
Backlog is strong. A lot of it is promised work, and we’ll staff up as needed.
How Rejigg helps: Use Rejigg’s data room to share a clean signed-backlog view early, then add job-level backups later as buyer intent becomes real. Learn more in the guide
Owner Dependence
What do you personally touch every week that would break without you?
Buyers price how transferable the operation is. In electrical, the usual choke points are estimating, service dispatch, permit admin, and a handful of GC or property manager relationships. If every answer ends with “I jump in,” buyers assume they’re buying your personal output.
How to prepare
- Write your weekly responsibilities and name the person who can own each within 90 days
- Hand off estimating, dispatch, and permit flow with simple rules and approval thresholds
- Introduce key customers to your PM or service manager now and move day-to-day contact off your phone
Great Answer
I touch three areas weekly: final bid review on jobs over $50k, exception handling in dispatch when emergencies hit, and two key GC relationships. Our estimator already runs takeoffs and pricing, and we’ve set a rule that I only review bids above the threshold. Dispatch is owned by our service manager, and we’ve already transitioned the GC accounts so they call our PM first.
Okay
I’m involved in estimating and big relationships, but I have good people. I can stay on for a transition.
Gives Pause
I handle most of the important stuff, but I work hard, and the team knows what to do.
How Rejigg helps: Rejigg’s buyer calls, messaging, and staged disclosure help you pressure-test owner-dependence early and document a believable transition plan. Learn more in the guide
Field Leadership
What does your labor bench look like in the field—foremen, service leads, and apprentices?
Electrical capacity comes down to who can run work cleanly and safely without blowing labor. Buyers look for foremen depth, service leads who can diagnose quickly, and whether apprentices are progressing with real supervision. A shop that relies on one “hero foreman” feels fragile and hard to scale.
How to prepare
- Share headcount by role and license level, including who can run TI, service, and specialty work
- Document recruiting and development: pay progression, schooling support, and apprentice supervision
- Explain how you cover peaks with subs or temp labor and how you control quality and safety
Great Answer
We have four foremen who can run TI jobs independently, two service leads, and six apprentices paired with named journeymen. Here’s our pay progression and schooling support, plus how we track callbacks by tech so coaching happens fast. When we use temp labor, they work under a foreman, and they don’t run inspections.
Okay
We’ve got a solid crew and a couple of strong foremen. Hiring is always a challenge, but we manage.
Gives Pause
If we get tight on labor, I jump in and run jobs. Foremen are hard to find, so we take what we can get.
How Rejigg helps: Rejigg’s data room lets you share a buyer-friendly coverage view without sending sensitive employee details to unvetted buyers. Learn more in the guide
Safety & Claims
What incidents have you had, and what did you change?
Safety shows up in insurance costs, jobsite access, and whether GCs trust you. Buyers want to see a real routine and a learning loop after incidents. A prior claim is often workable. What worries buyers is a vague story, missing documentation, or a culture that treats shocks and falls as “part of the job.”
How to prepare
- Summarize recent claims, OSHA interactions, and auto incidents with the corrective action taken
- Organize training records for lockout/tagout, energized work rules, arc-flash, and PPE enforcement
- Provide proof of routine: tailgate logs, job hazard analysis usage, and field audit notes
Great Answer
We had one recordable two years ago and a minor auto claim last year. Here’s what changed: daily job hazard analyses on commercial sites, tighter ladder staging, and documented lockout/tagout refreshers during onboarding. We can show tailgate logs and training records by employee.
Okay
We take safety seriously and do tailgate talks. We’ve had a couple of incidents, but nothing major.
Gives Pause
Safety hasn’t been a problem. Stuff happens in construction.
How Rejigg helps: Store safety logs, claims summaries, and policy documents in Rejigg’s secure data room so diligence stays organized and controlled. Learn more in the guide
Work Mix & Leads
What’s your real work mix—and how does work actually come in?
Buyers value electrical shops based on the economics of each work type, plus how predictable the next job is. They want to see margins and cash timing by service, TI, new construction, gear replacements, and recurring maintenance. They also look at lead flow. Vendor lists, property manager relationships, and steady inbound calls usually feel more durable than work that depends on the owner’s personal network.
How to prepare
- Break revenue down by work type and customer type with typical margin range and payment timing for each
- Bring 6–10 recent jobs showing ticket size, duration, crew size, and what commonly causes overruns
- Document lead sources and the handoff: who answers, who estimates, who follows up, and response targets
Great Answer
We’re 60% service and small commercial, 25% TI, and 15% gear replacements. Service runs higher margin and gets paid fast. TI is slower cash with retainage, so we manage it with strict change-order tracking and closeout discipline. Leads come from repeat property managers and inbound calls, and our service manager is the primary contact.
Okay
We do a mix of service and projects and stay busy. Most work is repeat and referral.
Gives Pause
We’ll do anything electrical. Work comes in because people know me.
How Rejigg helps: Rejigg helps you present your work mix clearly to the right buyer types, then track conversations and compare offers side-by-side. Learn more in the guide
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Questions Electrical Services Owners Ask Us
What is an electrical contracting business typically worth?
Most electrical contractors are priced off the cash the owner can reliably take out each year, adjusted for owner expenses that won’t continue for a new owner. Service-heavy shops with fast invoicing, low callbacks, and strong foremen often price better than project-heavy contractors with lots of retainage and thin job-cost tracking. Use Rejigg’s free valuation calculator for a starting range, then pressure-test it against license coverage and job-cost proof.
Can a buyer use an SBA loan to buy an electrical contractor?
Yes. Many electrical deals can qualify for an SBA 7(a) loan, especially when cash flow is easy to document and the work mix is stable. The lender will still dig into license and qualifier continuity, customer concentration, and whether cash gets stuck in retainage or old receivables. You can run payment and down payment scenarios with Rejigg’s SBA loan calculator to see what a buyer can realistically afford.
How long does it take to sell an electrical services business?
Many electrical sales close in a few months, but timelines stretch when the qualifier plan is unclear, job-cost history is messy, or AR and retainage need a lot of explaining. Deals move faster when you already have a buyer-ready data room and a written transition plan for estimating, dispatch, and permitting. Rejigg supports the whole timeline with buyer vetting, digital NDAs, and a built-in data room.
Do I need a broker to sell my electrical contracting company?
No. Brokers typically charge 5–10% of the sale price for packaging and running outreach that you can handle yourself with the right process and tools. Rejigg gives you access to serious buyers, pre-vetted introductions, digital NDAs, a secure data room, and deal tracking. It’s free for sellers. If you want to plan what to share and when, start with the preparation guide.
What financial statements do buyers want for an electrical contractor sale?
Buyers usually want three years of profit-and-loss statements, a current year-to-date report, and enough detail to separate service work from project work. They also focus on electrical-specific balance sheet items like retainage receivable, any work-in-progress reporting you use, and debt tied to trucks and equipment. If you use QuickBooks, Rejigg’s QuickBooks integration can pull financials into a structured data room so you are not rebuilding spreadsheets.
How should I handle owner add-backs for an electrical business valuation?
Add-backs are expenses a new owner will not have, like personal vehicle costs, above-market owner salary, or one-time legal or settlement fees. Electrical shops get muddy around trucks, fuel cards, phones, tool purchases, and shop expenses that mix personal and business use. The clean way to do it is to list each add-back with a receipt or ledger line and a one-sentence reason. Rejigg’s valuation flow and data room layout make it easier to show buyers what is truly discretionary.
What is a working capital adjustment in an electrical contracting deal?
A working capital adjustment sets how much day-to-day cash, receivables, and payables stay in the business at closing so the buyer can operate immediately. In electrical contracting, it often turns into a practical discussion about retainage, supply-house payables, and payroll timing. You are aiming for a normal level for your shop, based on history, not a perfect number. Rejigg’s negotiation guide shows how to avoid last-minute surprises.
How are trucks, tools, and equipment valued when selling an electrical contractor?
Some deals include trucks and equipment in the purchase price. Others price them separately, depending on how the offer is structured. For electrical contractors, buyers care about what can run tomorrow: service vans in decent shape, specialty testers that are current and calibrated, and whether tool spending is cleanly business-related. A clear fleet and equipment list with ownership status and maintenance notes keeps the conversation from turning into haggling. Rejigg’s data room is a good place to store the list and backups.
Should I include inventory like wire, breakers, and dead stock in the sale?
Most of the time, buyers expect normal on-hand material that keeps trucks and the shop operating. The sticky part is dead stock: leftover job material, oddball breakers, obsolete fixtures, and wire that has not moved in a long time. If you separate “working inventory” from “leftovers,” you usually avoid a price fight. Use Rejigg’s data room to share an inventory snapshot plus how you manage truck stock and replenishment, so buyers do not assume it is all scrap.
How do non-competes work when selling an electrical contracting business?
Buyers usually ask for a non-compete so you do not sell the shop and then reopen nearby with the same customers and techs. What is enforceable depends on your state, but in real deals, it comes down to a reasonable radius, a reasonable time period, and clear definitions of what work you can and cannot do. You can often carve out employment in a different role or a different niche. Rejigg’s deal negotiation guide helps you spot terms that are normal versus overreach.
What’s a reasonable transition period after selling an electrical business?
A common transition is a few months of real overlap, followed by a step-down period where you are available for key relationships and weird edge cases. In electrical, the timeline often ties to qualifier coverage and permit continuity, plus the handoff of estimating and service dispatch. Put the scope in writing so you are not on-call forever. Rejigg’s transition planning guide walks through practical handoffs.
What documents should I put in an electrical contractor due diligence folder?
Beyond standard financials, buyers usually ask for license and jurisdiction coverage, job-cost samples, a change-order log, backlog detail, AR and retainage schedules, fleet and equipment lists, and safety documentation. They are trying to confirm you can pull permits, control labor mid-job, and turn billed work into collected cash. Rejigg’s due diligence checklist follows the order in which buyers commonly request items.
How can I sell my electrical business without my employees finding out too early?
Use staged disclosure. Share proof of operations first without exposing your full employee roster, customer list, or job pipeline, then open deeper access only after a buyer is vetted and has signed an NDA. Electrical shops are sensitive because strong foremen and service techs are easy to recruit, and jobsite gossip travels fast. Rejigg helps by pre-vetting buyers, requiring digital NDAs, and letting you control exactly what each buyer can see inside the data room.
How do buyers look at customer concentration for electrical contractors?
Buyers look at who controls your schedule and your margin, not just revenue percentages. One GC might be a modest share of sales but consume most of your best crew time. Or, they might be the source of your worst fixed-price work. A solid seller can explain how work is awarded, who the real decision-maker is, and what tends to happen when a superintendent or property manager changes companies. Rejigg’s deal tracking helps you keep that story consistent across buyer calls.
What makes service-heavy electrical contractors more valuable?
Service-heavy shops can be more valuable because cash comes in faster and growth can look like adding one more truck instead of betting on one big bid. Buyers still dig into dispatch discipline, same-day invoicing, parts readiness, and callback rates because that is where service margins leak. They also ask about after-hours coverage and warranty work. Rejigg lets you share service metrics and process docs in a controlled way once a buyer is serious.
How do taxes work when selling an electrical contracting business?
Taxes depend on whether you sell the company itself or sell assets like trucks, equipment, and contracts. Electrical deals often have meaningful equipment value, which can create different tax outcomes than a pure office-based service business. Bring your tax pro in early, before you agree to terms, so a good headline price does not turn into disappointing after-tax proceeds. Rejigg helps you compare offers side-by-side so you can see how deal structure changes what you actually keep.
Should I accept seller financing when selling an electrical shop?
Seller financing is common in contractor deals because it can bridge a valuation gap and help the buyer close, especially when lenders discount project-heavy revenue or retainage-heavy cash flow. The practical question is how you get paid back and what protection you have if the buyer stumbles. Focus on down payment size, interest rate, term length, and clear default language. Rejigg’s offer comparison dashboard helps you line up offers and see the risk in the terms, not just the top-line number.
What’s an earnout, and is it common in electrical contractor deals?
An earnout means part of the price is paid later if the business hits agreed targets after closing. In electrical contracting, earnouts show up when buyers feel uncertain about backlog converting, relationships that sit with the owner, or whether service demand holds after the handoff. Earnouts can work when the measurement is simple and you still have enough influence to affect the outcome. Rejigg helps you compare earnout terms side-by-side so the “highest” offer is not quietly the riskiest.
