What It Actually Takes to Own a Home Services Business in 2026

Blackstone paid roughly $2.5 billion for Champions Group at 18.5x EBITDA in 2025. Goldman Sachs Alternatives took a majority stake in Sila Services at an implied 17-20x. Meanwhile, the small HVAC shop those platforms are buying trades for 3-8x EBITDA, and an independent operator can launch one for under $80,000.

The gap between those two numbers is the entire opportunity. You can build, buy, or scale into a business that PE wants to acquire at a 2-3x markup on what you paid to get in.

This guide is for the buyer making a $50K to $500K bet on owning one. The numbers below come from Owned and Operated, Tommy Mello’s A1 Garage Door playbook, Capstone Partners M&A data, and operators posting their P&L on r/sweatystartup.

What does it actually cost to start one from scratch?

Independent HVAC or plumbing startup costs run $40,000-$80,000 according to Housecall Pro and Workiz operator surveys, with bare-bones launches as low as $10,000-$20,000 in rural markets where you already own the truck.

The line items are predictable. A used van: $20,000-$35,000. Tools and equipment: $5,000-$15,000. Licensing and insurance: $2,500-$8,000 annually. Marketing to make the phone ring: $5,000-$15,000 in the first six months.

Add a first employee plus payroll, and Owned and Operated puts the real cash-to-breakeven number closer to $90,000 before your first dollar of profit. That assumes you’re billable on day one and not learning the trade.

A lawn care operator on r/sweatystartup hit $100,000 in revenue and $70,000 in profit in year one with zero marketing spend, working 54 hours per week for 32 weeks. That’s the upside. He also worked door-to-door for the first 90 days. There’s no shortcut around customer acquisition when you start cold.

The downside is just as real. Most independent home service shops report net margins of 3-15% in their first three years per Franchise Sidekick benchmarking data, which means a $500K revenue business is generating $15K-$75K in actual cash for the owner. That’s a job with overhead.

Should you buy an existing book instead?

Buying solves the cold-start problem. You inherit a customer list, recurring revenue, trained staff, and cash flow on day one.

Small home service acquisitions trade for 3-8x EBITDA according to Capstone Partners’ July 2025 M&A report, with the median small-business deal closing around 4-5x. A shop doing $200K in seller’s discretionary earnings would run $800K-$1M to acquire.

The SBA 7(a) loan program covers most home service acquisitions up to $5M with 10% down. Math: a $1M acquisition with $200K EBITDA and a $900K SBA loan at ~10% interest gives you roughly $115K/year debt service against $200K earnings. That leaves $85K for owner draw plus reinvestment, before you do anything to grow it.

John Wilson of Wilson Companies grew his Ohio family business from $3M to $40M+ in revenue through 12 acquisitions over roughly 10 years, hitting 24% EBITDA in the process. On a recent Owned and Operated episode he walked through buying three businesses in 90 days. The strategy: buy small books in adjacent trades, plug them into your existing call center and dispatch, eliminate redundant overhead, push the EBITDA up by 5-10 points within 12 months.

Wilson’s playbook works because acquisition arbitrage is real. You buy at 4x and sell at 12x when the combined platform hits scale. That’s the same arbitrage private equity rollups are running, just at smaller dollar amounts.

The risk: you can inherit a broken business. Bad reviews, customer concentration, key technicians who walk when the old owner leaves, equipment at end-of-life. Spend the $5K-$15K on a proper QofE (Quality of Earnings) review before you sign.

Buy vs start vs scale: how do the numbers actually compare?

Path	Cash to launch	Time to first revenue	Year 1 owner income	Year 3 realistic ceiling
Start independent	$40K-$80K	30-90 days	$0-$60K	$250K-$500K revenue, $30K-$75K owner pay
Buy small franchise	$100K-$300K	30-60 days	$0-$75K	$400K-$800K revenue, $75K-$150K owner pay
Buy existing book	$200K-$1M+ down	Day 1	$80K-$250K	$1M-$3M revenue, $150K-$400K owner pay
Scale solo to crew	Existing $200K+ business	N/A	Reinvested	$1M-$3M revenue, plus 5-10x equity multiple

Starting cold is the highest variance path. You might hit Sweaty Startup-style numbers ($100K personal income year one) or burn through $90K and quit by month 18. Independent failure rates run 3-5x higher than acquired-business failure rates per Sunbelt Business Brokers data.

Buying a book gives you the safest cash flow but the slowest equity build. You own a job that pays $150K-$250K and stays there unless you push into the scaling-from-1m-to-3m zone.

Scaling an existing business has the highest equity outcome. A contractor on the Owned and Operated podcast described stepping off the tools and watching his close rate jump 15-25%, which is the same delta ServiceTitan benchmarks show for owner-led sales versus tech-led sales.

What’s the franchise math actually look like?

A home service franchise costs $100,000-$300,000 to launch per Franchise Ki’s 2025 industry comparison, with franchise fees running $10,000-$50,000 on top of equipment and territory costs.

Royalties run 6-8% of gross sales for most home service brands per Neighborly and Horsepower Brands franchise disclosure documents. On $500K in revenue, that’s $30K-$40K paid to corporate annually, regardless of your profit.

Add 1-3% national marketing fees on top. A franchise doing $500K is paying $35K-$55K/year in royalty plus marketing. That’s a full-time technician’s salary going to the brand.

The tradeoff is real for some operators. Neighborly franchisees report 10-50% profit margins versus 3-15% for independents, partly because the brand drives lead flow you’d otherwise pay $5K-$15K/month to generate yourself.

The honest math: franchises work for operators who hate marketing and want a playbook. Independents work for operators who’d rather keep the 6-8% and run their own lead generation systems.

Which trade should you actually pick?

The trade picks you more than you pick it. Your existing license, network, and capital constraint matter more than industry margins.

That said, HVAC commands the highest acquisition multiples because of the maintenance agreement durability. Recurring revenue from service contracts trades at premium multiples per Capstone’s M&A data, which is why PE platforms like Apex Service Partners closed approximately 60 add-on HVAC acquisitions in 2025 alone.

Plumbing runs close behind. Average tickets are lower ($350-$600 vs HVAC’s $600-$1,500) but emergency call volume is higher and customer acquisition cost is lower. The combined plumbing-HVAC operator is the buyer favorite right now.

Electrical is harder to scale on residential alone. Margins are thinner, ticket sizes lower, and recurring revenue components are weaker. Commercial electrical is a different game with higher capital requirements.

Garage doors made Tommy Mello a billionaire. A1 Garage Door Service hit $220M-$250M in annual revenue across 800-1,000 employees in 18-20 states by 2025 per Owned and Operated’s Legends episode. The trade has high ticket prices ($800-$3,000 averages), low competition in most markets, and a service-replace model that compounds well.

Roofing has the highest individual ticket sizes but is project-based with weak recurring revenue. Buyers discount roofing businesses 1-2x against HVAC at the same EBITDA because there’s no maintenance agreement base to model forward.

Why is private equity buying everything?

PE has made nearly 800 home service acquisitions since 2022 per industry tracking, and the pace accelerated 88.2% year-over-year in 2025 add-on activity.

The math is simple. They buy small books at 3-8x EBITDA. They roll them into platforms that trade at 14-18x. A business they acquire for $2M can be flipped at an effective enterprise value of $6M-$10M within 5-7 years.

For an independent operator, this is both opportunity and threat. You’re competing against PE platforms that have unlimited marketing budgets, regional call centers, and pricing power. They can lose money on customer acquisition for 18 months to grab market share.

You’re also competing for the eventual exit. If you build a clean book with documented systems, recurring revenue, and reduced owner dependency, you become the target they want to buy. PE wants businesses doing $1M-$5M EBITDA with 30%+ recurring revenue. Build to that profile and your exit multiple goes from 3x to 6x-8x.

Most operators won’t get there. Per BizBuySell data referenced in the Owned and Operated podcast, 73% of home service business owners want to sell but only 20-30% of listed businesses actually transact. The gap is preparation. Start exit planning 3-5 years before you want out, not 6 months before.

What kills new owners in years 1-3?

Cash. The most common failure mode isn’t bad work or no leads. It’s running out of working capital between job completion and payment.

A roofer doing $80K in revenue in month four can still be insolvent if his receivables are stretched 60 days and his supplier wants payment in 30. Plan for 90 days of operating expenses in reserve before you even start running calls.

Second failure mode: hiring too fast. New owners feel pressure to add a second tech the moment the calendar gets full. But the first office hire usually generates more leverage than the second technician, because answering the phone is what’s costing you jobs.

Third failure mode: marketing chaos. New owners spend $3K-$5K/month on Angi leads, Google Ads, Facebook, postcards, and door-knocking simultaneously, and can’t tell which channel actually produced revenue. Pick two channels, master them for six months, then add a third. Track cost per lead by trade so you know what good looks like.

Fourth failure mode: the owner stays on the tools too long. Most independents plateau at $500K-$750K because they can’t get off the truck. The transition from owner-operator to business owner is the single biggest revenue unlock available to most shops.

What does the realistic path look like?

Year one solo, full-throttle: $250K-$500K in revenue, $40K-$80K in personal income, 60-hour weeks. You’re learning sales, ops, marketing, and the trade simultaneously.

Year two with first tech: $500K-$1M in revenue, $80K-$150K in personal income, you’re starting to step off the tools. Crews of 3-5 people in mid-sized markets routinely produce $200K+/year for the owner per Sweaty Startup operator reports.

Year three with systems: $1M-$2M in revenue, $150K-$300K in personal income, you’re managing the business. This is the threshold where PE starts paying attention.

Year five with scale: $3M-$8M in revenue, $400K-$1M in personal income, multi-truck operation, 20-30% EBITDA margins. You’re either a target for acquisition or an acquirer yourself.

The Tommy Mello version of this took 18 years from garage door startup to $220M in annual revenue. The John Wilson version took 10 years from a $3M family business to $40M through 12 acquisitions. Both are outliers. The median good operator hits $2M-$5M and sells for 5x-7x EBITDA.

Frequently Asked Questions

How much money do you actually need in the bank to start?

Plan on $40K-$80K for an independent launch plus 90 days of operating expenses ($15K-$30K). A franchise needs $100K-$300K plus reserves. SBA 7(a) loans cover acquisitions up to $5M with 10% down, but you still need $50K-$200K in personal cash for the down payment and working capital.

Is it better to buy or start?

Buying is lower risk and faster cash flow but higher capital requirement. Starting is cheaper but you’ll spend 6-18 months at zero income. If you have $200K+ in cash and access to SBA financing, buying a small book is usually the higher expected return. If you have $40K-$80K and existing trade skills, starting cold is the only option.

What’s the best trade to pick?

HVAC has the highest acquisition multiples because of recurring maintenance agreements. Plumbing is close behind with high emergency call frequency. Electrical scales harder on residential alone. Roofing has high tickets but no recurring revenue base. Garage doors and other specialty niches (gutter cleaning, chimney sweeping, septic) have lower competition but smaller addressable markets.

Should I franchise or go independent?

Franchise if you want a playbook and hate marketing. Expect to pay 6-8% royalty plus 1-3% marketing fees on gross revenue forever. Independent if you’d rather keep that 7-11% and build your own systems. Independents have lower startup costs ($40K-$80K vs $100K-$300K) but higher operational learning curves.

How long until I can step off the tools?

If you’re running calls personally and have demand to fill a second truck, your first technician hire typically pays for itself within 60-90 days. Most owners can fully step off the tools in 18-36 months if they build systems before they hire.

The actual decision

If you have $40K-$80K, existing trade skills, and 24 months of runway: start independent in HVAC or plumbing. Build to $500K revenue, then add your first tech.

If you have $200K-$500K and want faster cash flow: buy a small book with $150K-$300K in SDE using SBA financing. Improve operations for 24 months, then add bolt-ons.

If you have $100K-$300K and don’t want to figure out marketing yourself: franchise with a brand that’s strong in your territory. Plan on 6-8% royalty being the price of the playbook.

If you already own a $500K-$2M home service business: the highest-return move is stepping off the tools and building systems that survive your absence. PE pays premium multiples for businesses where the owner works less than 10 hours/week.

The home services sector is consolidating fast. Either you build something PE wants to buy, or you compete against the platforms they’re building. The window for getting in at independent pricing is still open. It won’t be in five years.