Common seller tricks in plumbing
Listings often blur service calls, remodels, and a single general contractor’s work into one smooth revenue line.
- A ‘master on staff’ who is the seller, with no plan for a qualifying plumber after close.
- Remodel or new-construction revenue treated as if it were service-call cash flow.
- Family members billed as helpers, or helpers doing work that requires a licensed journeyman.
- Drain-cleaning specials that bring low-margin work and high callback risk.
- Unpaid change orders or unfinished jobs that become your warranty.
Which numbers to verify
Break revenue into service, drain cleaning, remodels, and new construction. Reconcile deposits and look at job-level margins on the larger remodels. Confirm how much work sits in backlog, and whether deposits from customers are a liability you inherit. Recast owner hours: a shop that only works because the owner is on the truck six days a week has a different SDE than the P&L shows.
Licensing and key-person risk
Many states require a master or qualifying plumber to be attached to the company in order to pull permits. That license is personal. If the seller is the only master, you cannot assume you can operate Monday after close. Ask what the state requires to transfer or replace that qualifier, how long it takes, and whether a journeyman on the crew can sit for the exam. Bonding and municipal licenses can be separate issues.
Equipment and condition
Inspect jetters, cameras, locators, and trenchers for hours and leaks. Ask whether excavation is subcontracted. Check trucks for tanks, racks, and rust. A camera that cannot be calibrated or a jetter near the end of its life is a near-term check, not a footnote.
Seasonality and the calendar
Frozen-pipe winters and spring remodel seasons can dominate the calendar. Look at monthly receipts. A buyer who closes in late fall may fund a quiet quarter before the work returns. On-call rotation is part of the product; ask who actually carries the phone.
Customer concentration
A tract builder, a property-management company, or one plumber-friendly general contractor can be a dangerous share of revenue. Those accounts often follow the person who answers the phone, not the company name. Get a customer list with percentages and ask which relationships are under contract.
Questions to ask before you make an offer
- Who is the qualifying or master plumber of record, and what is required for me to operate and pull permits after close?
- Please split the last 24 months of revenue into service, remodeled jobs, and new construction, reconciled to deposits.
- What backlog is under contract, and what customer deposits or incomplete work will I inherit?
- How is after-hours coverage staffed, and how many of those calls does the owner take?
- May I review warranty callbacks and unpaid change orders for the last two years?
- What share of revenue comes from your largest three accounts, and are those agreements assignable?
- Which family members work in the business, and what do they actually do?
- May I inspect the jetter, cameras, and trucks, including hours and liens?
- Are there municipal or utility bonds that have to be replaced in my name?
- After an LOI, may I speak with your accountant and your lead journeyman?