Three inputs directly affect your valuation multiples and discount rate. Each is shown below with its current status and exact impact on your result.
EXECUTIVE SUMMARY The valuation range for Briggs Mechanical Services LLC is $1,806,582 to $2,550,469. This range is derived from a triangulation of three valuation methods: Discounted Cash Flow (DCF), Market Multiples, and Asset-Based Valuation. The business's strong financial performance, tempered by significant key person risk and moderate customer concentration, positions it within this range. The triangulated value reflects both the growth potential and the risks associated with the business.
BUSINESS PROFILE & FINANCIAL HEALTH Briggs Mechanical Services LLC has demonstrated consistent revenue growth, with a 3-year CAGR of 6.9%, reaching $1,200,000 in annual revenue. The business maintains a healthy profitability margin of 32.5%, with Seller's Discretionary Earnings (SDE) at $601,000, indicating strong operational efficiency. Compared to industry benchmarks, these figures suggest above-average profitability, although the high key person dependency poses a significant risk to sustained performance.
VALUATION METHOD 1 — DCF ANALYSIS The DCF valuation of $3,536,916 is based on a 6.0% growth rate, reflecting historical performance and industry growth expectations. The discount rate of 22.2% accounts for company-specific risks, including a 5.0% premium for key person dependency and 1.0% for customer concentration. The terminal value of $1,535,697 was derived using a perpetual growth model, assuming continued moderate growth beyond the projection period.
VALUATION METHOD 2 — MARKET MULTIPLES The market multiples approach yields a valuation range of $901,500 to $1,502,500, based on an SDE multiple range of 1.5x to 2.5x. The business's strong SDE and growth trajectory push it toward the higher end of this range, but adjustments for key person risk temper the valuation. This method reflects what similar businesses in the General Business category might command in the market.
VALUATION METHOD 3 — ASSET-BASED The asset-based valuation totals $1,131,500, comprising $230,000 in tangible assets and $901,500 in goodwill (calculated at 1.5x SDE). This method is particularly relevant for assessing the liquidation value and provides a floor for the business's worth, emphasizing the tangible and intangible assets' contribution to overall value.
INDUSTRY BENCHMARKS & COMPARISON Briggs Mechanical Services LLC outperforms typical General Business benchmarks in profitability margins and growth rates. However, industry risks such as market saturation and economic cycles, combined with high owner dependency, pose challenges. Key value drivers include customer retention and operational efficiency, which are crucial for maintaining competitive advantage and enhancing valuation.
GROWTH SCENARIOS The optimistic growth scenario projects a valuation of $4,353,592, achievable through strategic initiatives to reduce key person dependency and diversify the customer base. To reach this scenario, the owner should focus on process documentation, relationship transfer, and expanding service offerings to mitigate risks and capitalize on growth opportunities.
STRATEGIC RECOMMENDATIONS
(d) What buyers will scrutinize hardest: Buyers will focus on the high owner dependency, assessing the depth of management and employee capabilities. They will also examine the moderate customer concentration and the sustainability of recurring revenue streams. Additionally, they will evaluate the condition and value of tangible assets.
(e) Deal structure & mechanics: This is likely to be an asset sale, common in the General Business category, with potential earnout provisions tied to future performance to mitigate risks associated with key person dependency. A typical transition period may range from 6 to 12 months, aligning with the owner's 3-5 year sale timeline.
| Period | Projected FCF | Growth Rate | Present Value |
|---|---|---|---|
| Year 1 | $637,060 | 6.0% | $521,326 |
| Year 2 | $675,284 | 6.0% | $452,214 |
| Year 3 | $715,801 | 6.0% | $392,264 |
| Year 4 | $758,749 | 6.0% | $340,262 |
| Year 5 | $804,274 | 6.0% | $295,153 |
| Terminal Value (PV) | Gordon Growth Model @ 2.5% terminal growth | $1,535,697 | |
| Total DCF Value | $3,536,916 | ||
Growth rate: 6.0% | Discount rate: 22.2% (build-up method)
| Multiple Basis | Range | This Business | Value Range |
|---|---|---|---|
| Revenue Multiple | 0.29x – 0.63x | $1,200,000 | $348,000 – $756,000 |
| SDE Multiple (Primary) | 1.5x – 2.5x | $601,000 | $901,500 – $1,502,500 |
Industry: General Business | Typical buyers: Individual operators, local investors
| # | Action | Est. Impact |
|---|---|---|
| 1 | Reduce key person dependency to Low | +$910,882 |
| 2 | Grow revenue by 25% | +$531,348 |
| 3 | Diversify customer base (no single customer >15%) | +$236,155 |
| 4 | Grow recurring revenue to 50%+ | +$111,583 |
| Annual Revenue | $1,200,000 |
| Total Business Expenses | − $810,000 |
| Net Profit | $390,000 |
| Add back: Owner Compensation | + $140,000 |
| Reported SDE (net profit + owner compensation) | $530,000 |
| Recurring Add-Backs (apply to all years) | |
| Owner's health insurance through business | + $14,000 |
| Owner's retirement contributions | + $18,000 |
| Personal vehicle expenses | + $9,000 |
| Personal phone/travel/meals/entertainment | + $6,000 |
| Rent Normalization (apply to all years) | |
| Above-market rent — add back excess (actual $66,000 vs. market $42,000) | + $24,000 |
| Normalized SDE (used for valuation) | $601,000 |
| 2 years ago — Normalized SDE | $526,000 |
| 1 year ago — Normalized SDE | $566,000 |
| Current year — Recurring SDE (excludes one-time add-backs) | $601,000 |
| Earnings consistency (coefficient of variation) | 5.4% — stable |
| Risk-free rate (10-yr Treasury) | 4.4% |
| Equity risk premium | 5.5% |
| Small company premium | 5.0% |
| Industry risk adjustment (General Business) | +2.0% |
| ⚠ Key person dependency risk (High) | +5.0% |
| ⚠ Customer concentration risk (Moderate) | +1.0% |
| ✓ Recurring revenue reduces risk (35% recurring) | −0.7% |
| Total Discount Rate | 22.2% |
| Period | Projected FCF | Present Value |
|---|---|---|
| Year 1 | $637,060 | $521,326 |
| Year 2 | $675,284 | $452,214 |
| Year 3 | $715,801 | $392,264 |
| Year 4 | $758,749 | $340,262 |
| Year 5 | $804,274 | $295,153 |
| Terminal Value (PV) | — | $1,535,697 |
| DCF Value | $3,536,916 | |
| Industry baseline SDE multiple range | 1.5x – 3.0x |
| Industry baseline revenue multiple range | 0.30x – 0.80x |
| Key person risk adjustment (multiplicative) | ×0.70 (−30%) |
| Customer concentration adjustment (multiplicative) | ×0.93 (−7%) |
| Recurring revenue premium (additive) | +0.42x SDE |
| Final adjusted SDE multiple range | 1.5x – 2.5x |
| SDE-based value range (final SDE multiple × $601,000) | $901,500 – $1,502,500 |
| Revenue-based value range (final revenue multiple × $1,200,000) | $348,000 – $756,000 |
| Market Multiples Value (SDE-based, primary) | $901,500 – $1,502,500 |
| Equipment value | $185,000 |
| Inventory value | $45,000 |
| Goodwill estimate (1.5x SDE) | $901,500 |
| Real estate — excluded, sold separately | $720,000 |
| Asset-Based Floor Value | $1,131,500 |
| DCF value | 40% weight | $3,536,916 |
| Market multiples midpoint | 45% weight | $1,202,000 |
| Asset-based floor | 15% weight | $1,131,500 |
| Triangulated Value | $2,125,391 | |
| Assumption | Base Case | Low Case | High Case |
|---|---|---|---|
| Growth rate | 6.0% | 3.0% | 9.0% |
| Discount rate | 22.2% | 20.2% | 24.2% |
| Market multiples | Risk-adjusted base | −5% contraction | +5% expansion |
| Business Overview | |
| Business name | Briggs Mechanical Services LLC |
| Industry | home_services |
| State / location | TX |
| Years in business | 14 years |
| Number of employees | 8 |
| Business structure / entity type | Sole Proprietor / Single-member LLC |
| Financials | |
| Annual revenue | $1,200,000 |
| Annual expenses | $810,000 |
| Net profit | $390,000 |
| Owner compensation (salary / draws / guaranteed payments) | $140,000 |
| Owner add-backs (sum of recurring + one-time) | $47,000 |
| Rent normalization adjustment | +$24,000 |
| Normalized SDE (used for valuation) | $601,000 |
| Revenue history (2yr ago → 1yr ago → current) | $1,050,000 → $1,135,000 → $1,200,000 |
| Revenue CAGR (calculated) | +6.9% |
| Net profit history (2yr ago → 1yr ago) | $315,000 → $355,000 |
| Earnings volatility (CV) | 5.4% (stable) |
| Risk Factors | |
| Key person dependency | High — the business is largely me |
| Customer concentration | top customer 16% of revenue; top 3 32% |
| Recurring revenue | 35.0% of revenue |
| Assets & Property | |
| Location ownership | Owns building |
| Current annual rent paid | $66,000 |
| Estimated market annual rent | $42,000 |
| Rent paid to related entity | Yes (LLC controlled by owner) |
| Equipment value | $185,000 |
| Inventory value | $45,000 |
| Owns real estate | Yes (selling separately) |
| Intellectual property | No |
| Valuation Parameters | |
| Risk-free rate used | 4.4% (live — Federal Reserve) |
| Discount rate (calculated) | 22.2% |
| Report generated | May 10, 2026 |
This report is generated for informational and planning purposes only and does not constitute a formal business appraisal, financial advice, legal opinion, or tax advice. It is not a recommendation to buy, sell, or hold any business interest, security, insurance product, or other financial instrument. Valuations are based on the financial data provided by the submitter and publicly available industry benchmarks. Actual market value may vary based on due diligence findings, current market conditions, buyer/seller motivations, and factors not disclosed in this analysis. For any transaction, partnership dispute, tax filing, litigation, regulatory matter, or other situation requiring a defensible valuation, engage a credentialed business appraiser (ABV, ASA, CVA, or equivalent) or qualified attorney.