Buying a handyman business: due diligence checklist

A small owner-operated handyman shop often lists at about 1.7x to 2.6x seller's discretionary earnings (SDE). The biggest risk is revenue that walks out with the seller. Check these before you sign. Use a broker, a CPA and a lawyer.

Money

• 3 years of tax returns and P&L; reconcile to bank statements
• SDE worked out line by line (owner pay, add-backs you can verify)
• Revenue by month (seasonality) and by service type
• Average ticket, gross margin and job count by year
• Open estimates, deposits held and warranty obligations

Customers and marketing

• Share of revenue from repeat customers, referrals, Google, LSA, lead platforms
• Who owns the Google Business Profile, website, phone number and domain; transfer in the deal
• Reviews: count, rating, recent complaints
• Customer list in a system you can export (CRM / field software)
• Top 10 customers and any commercial accounts; are they tied to the owner personally?

Team and operations

• Who does the work: owner, W-2 techs, subs? Pay, tenure, will they stay?
• Written SOPs, price book, checklists (if none, budget time to build them)
• Vehicles, tools and equipment list with condition
• Software subscriptions and contracts you would take over

Legal

• Licenses and registrations (state, city); can they transfer to you?
• Insurance history and any claims
• Open disputes, liens or warranty claims
• If it is a franchise resale: franchisor approval, transfer fee, remaining term
• Seller transition period and non-compete in the purchase agreement

Financing

• SBA 7(a): at least 10% equity injection; a seller note on standby can cover part of it
• Working capital for the first 3 months

Multiples: BizQuest listings and BizBuySell service-business benchmarks. SBA: SOP 50 10 8. Not legal, tax or investment advice.