Business Valuation Report — Briggs Mechanical Services LLC

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Business Valuation Report

Briggs Mechanical Services LLC

HVAC · TX · 14 years in business

Prepared: August 26, 2026 · Recipient: sample-solo@valueai.pro

Estimated Business Value

$1,110,796 – $1,568,183

Midpoint: $1,306,819

DCF Analysis · 40% weight $2,020,378

Market Multiples · 45% weight $559,800 – $1,088,500

Asset-Based · 15% weight $852,000

◆ Triangulated Value $1,306,819

The triangulated value is the weighted blend of the three methods above — it will typically sit below a strong DCF and above the conservative asset & goodwill anchor. DCF is shown as a point estimate; its sensitivity to the discount rate is quantified in the appendix. Weighting rationale in the appendix.

Basis of value. Values in this report are an estimate of fair market value of the operating business as a going concern, following the Main-Street transaction convention: the operating assets and goodwill, including listed inventory, transfer free of business debts. This analysis does not collect balance-sheet liabilities, cash, or receivables — those items, and the working capital that conveys, are negotiated in an actual transaction and are outside this estimate. Effective date: financial data as submitted; market inputs as of report generation.

Valuation Factors

Three inputs directly affect your valuation multiples and discount rate. Each is shown below with its current status and exact impact on your result.

Key Person Dependency

▲ High — the business is substantially dependent on the owner

Valuation Impact

−30% on multiples

The 30% discount is applied once within the market-multiples method (it is not re-applied to that method's result). The same risk is also priced in the DCF method as a +5.00% discount-rate premium — each method prices this risk within its own framework before the two are blended; see the Methodology note in the appendix. To put the multiples side in context: re-running the full valuation with low key-person dependency raises the multiples-method midpoint by approximately $311,000 (engine-computed, same method as the improvement table). Buyers view high owner-dependence as a major risk requiring price discount or earn-out structures. To address: develop a documented succession plan, transition key client relationships to other team members, and build operational independence from the owner.

Customer Concentration

▲ Moderate — top customer 16%, top 3 32%

Valuation Impact

−6.6% on multiples

The 6.6% discount is applied once within the market-multiples method (it is not re-applied to that method's result). The same risk is also priced in the DCF method as a +1.00% discount-rate premium — each method prices this risk within its own framework before the two are blended; see the Methodology note in the appendix. To put the multiples side in context: re-running the full valuation with a fully diversified customer base raises the multiples-method midpoint by approximately $46,650 (engine-computed, same method as the improvement table). To recover this: diversify the customer base, formalize multi-year contracts with the largest customer, and develop pipeline depth in adjacent client segments.

Recurring Revenue

35% of revenue is recurring

Valuation Impact

+0.42x on multiples

Meaningful recurring revenue. Multiples increased by approximately $130,620 (+0.42x SDE) and discount rate reduced by 0.7pt — a substantial portion of revenue is predictable, which buyers value.

Key Financials

Annual Revenue

$1,200,000

Net Profit

$240,000

SDE (Seller's Discretionary Earnings)

$311,000

Owner Draws (already within net profit — not added back)

$140,000

Profit Margin

20.0%

SDE Margin

25.9%

Revenue Trend & Net Profit

Bars: revenue · Gold line: net profit (years provided)

Valuation Analysis

EXECUTIVE SUMMARY Briggs Mechanical Services LLC, an HVAC business in Texas, is valued between $1,110,796 and $1,568,183 based on a triangulation of Discounted Cash Flow (DCF), market multiples, and asset-based valuation methods. This range reflects the company's solid financial performance, tempered by significant key person dependency and moderate customer concentration risks. The valuation is influenced by the company's steady growth and recurring revenue, but also by the need for strategic improvements to reach industry top-quartile benchmarks.

BUSINESS PROFILE & FINANCIAL HEALTH Briggs Mechanical Services LLC has demonstrated a consistent growth trajectory with a 6.9% CAGR over the past three years, reaching an annual revenue of $1,200,000. The business maintains a profitability margin of 20.0% and an SDE margin of 25.9%, indicating efficient operations compared to industry norms. However, the revenue-to-expense ratio suggests room for cost optimization to enhance profitability further. The company's financial health is robust, yet improvements in recurring revenue and growth rates could align it more closely with top industry performers.

VALUATION METHOD 1 — DCF ANALYSIS The DCF analysis values the business at $2,020,378, based on a 6.0% growth rate derived from a blend of historical revenue CAGR and industry base rates. The 20.4% discount rate reflects company-specific risks, including a 5.0% key man risk and a 1.0% customer concentration risk, offset by a 0.7% reduction for recurring revenue. The present value of the terminal value is $941,951, underscoring the importance of long-term growth potential in this valuation method.

VALUATION METHOD 2 — MARKET MULTIPLES The market multiples approach yields a valuation range of $559,800 to $1,088,500, using a risk-adjusted SDE multiple range of 1.8x to 3.5x. This range accounts for the company's growth trend, key person dependency, customer concentration, and recurring revenue, all of which have been factored into the adjusted multiples. This method highlights the impact of operational risks on the business's market value.

VALUATION METHOD 3 — ASSET-BASED The asset-based valuation of $852,000 comprises $230,000 in tangible assets and $622,000 in goodwill, calculated as 2.0x SDE. This method is particularly relevant for businesses with significant tangible assets and provides a baseline value that reflects the company's physical and operational infrastructure.

INDUSTRY BENCHMARKS & COMPARISON Briggs Mechanical Services LLC's current growth rate of 6.9% and recurring revenue of 35.0% fall short of the industry top-quartile targets of 12% growth and 50% recurring revenue. The business faces industry-specific challenges such as labor shortages and technician retention, but also benefits from value drivers like maintenance agreements and potential for PE acquisition. Aligning with industry benchmarks could significantly enhance its market position and valuation.

GROWTH SCENARIOS The DCF scenario values based on industry growth benchmarks are $1,949,151 for median growth (5.0%), $2,208,752 for above-median trajectory (8.5%), and $2,498,748 for top-quartile growth (12.0%). To achieve the top-quartile scenario, the owner would need to focus on increasing recurring revenue streams and accelerating growth through strategic initiatives and operational improvements.

STRATEGIC RECOMMENDATIONS

Develop a comprehensive transition plan to mitigate high key person dependency, ensuring continuity and stability.
Increase recurring revenue to 50% by expanding maintenance agreements and service contracts.
Implement cost control measures to improve the revenue-to-expense ratio and enhance profitability.
Focus on technician retention and training to address labor shortages and maintain service quality.

BUYER PROFILE (a) Likely buyer archetypes: Potential buyers include regional consolidators building density, PE-backed home-services platforms seeking growth, strategic trade acquirers adding HVAC services, and individual owner-operators with industry experience. (b) Why each archetype would buy this specific business: The $1,200,000 revenue and $311,000 SDE make it attractive for consolidators and platforms looking to expand their footprint in Texas. Strategic acquirers might value the established customer base and operational history, while owner-operators could see it as a stable income source with growth potential. (c) Realistic buyer pool size: Moderate, due to geographic and operational constraints, but expanded by the business's established market presence and financial performance. (d) What buyers will scrutinize hardest: Buyers will focus on the high owner dependence, moderate customer concentration, and the sustainability of current growth rates. They will also examine the quality of recurring revenue streams and the potential for operational improvements. (e) Deal structure & mechanics: Likely to involve an asset sale with potential earnout terms to mitigate risks associated with key person dependency. A transition period will be crucial to ensure smooth ownership transfer. (f) Industry M&A dynamics: The HVAC industry is experiencing active consolidation, driven by PE roll-ups and succession-driven tuck-ins. Businesses with strong management and recurring revenue are particularly attractive in this environment.

DCF — 5-Year Cash Flow Projections

Period	Projected SDE (owner cash flow)	Growth Rate	Present Value
Year 1	$329,660	6.0%	$273,804
Year 2	$349,440	6.0%	$241,057
Year 3	$370,406	6.0%	$212,226
Year 4	$392,630	6.0%	$186,843
Year 5	$416,188	6.0%	$164,497
Terminal Value (PV)	Gordon Growth Model @ 2.5% terminal growth		$941,951
Total DCF Value			$2,020,378

Growth rate: 6.0% | Discount rate: 20.4% (build-up method) | Projected cash flow is SDE — the pre-tax owner benefit (not capex/tax-adjusted free cash flow); see appendix section 3 for the full convention. Terminal value is 47% of the DCF total.

Discount Rate — Build-Up Method

Risk-free rate (10-yr U.S. Treasury)4.55%

Equity risk premium5.50%

Small company premium5.00%

▲ Key person dependency risk+5.00%

▲ Customer concentration risk+1.00%

● Recurring revenue reduces risk−0.70%

Total Discount Rate20.4%

Components shown at two decimals; the total is rounded to 0.1 pt and bounded 15%–40% — the rows sum to the total within that final rounding. Full component sources and schedules: appendix sections 2 and 6b.

Company-specific risk adds 5.3% to the base rate, directly reducing the DCF value. Addressing these factors before a sale would lower the discount rate and increase business value.

Market Multiples — HVAC Benchmarks

Multiple Basis	Range	This Business	Value Range
Revenue Multiple	0.29x – 0.56x	$1,200,000	$348,000 – $672,000
SDE Multiple (Primary)	1.8x – 3.5x	$311,000	$559,800 – $1,088,500

Industry: HVAC | Multiples shown are the final risk-adjusted ranges (full adjustment path in appendix section 4)

Asset-Based Valuation Breakdown

Equipment & FF&E

$185,000

Inventory

$45,000

Goodwill (2.0x SDE)

$622,000

Real Estate — excluded, sold separately

$720,000

Total Asset Value

$852,000

Real estate (estimated $720,000) is owned by the seller and being sold separately. It is excluded from the operating-business asset total because the buyer of the business will not acquire the property.

DCF Sensitivity — Growth Rate Scenarios

How to read this chart. These are DCF-method values under three growth assumptions, NOT the headline triangulated valuation of $1,306,819 shown above. The triangulated value blends DCF (40% weight), Market Multiples (45%), and Asset-Based (15%) — so DCF alone typically runs higher than triangulated for profitable businesses. Use this chart to see how growth-rate changes affect the DCF component.

Growth rates anchored to HVAC industry benchmarks. The "24-month target" is when a top-quartile peer would achieve the growth rate; the 5-year DCF then projects that growth rate sustained over the projection horizon (with a terminal-value tail). The top-quartile target matches the "Reach top-quartile growth" recommendation in the Valuation Scenario Planner below.

Industry median $1,949,151

Maintaining typical industry growth pace (5.0% annual growth, yr5 revenue: $1,531,538)

Above-median trajectory $2,208,752

Operational improvements lifting growth above the industry median (8.5% annual growth, yr5 revenue: $1,804,388)

Top-quartile (24-month target) $2,498,748

Reaching top-quartile peer performance through targeted improvements (12.0% annual growth, yr5 revenue: $2,114,810)

Adjusted Valuation

—

Interactive Tool

Valuation Scenario Planner

Adjust the controls below to model both improvements and risks — like taking on a large new client that would raise concentration. Each control's row shows the dollar impact of the move: green for gains, red for costs.

Adjusted Valuation

← adjust controls below to see impact

Revenue Growth Rate

—

current

-25%0%+25%+50%+75%+100%

Modeled annual growth used in DCF projections.

Key Person Dependency

—

Customer Concentration

— Diversified

Top customer % of revenue

0% — Diversified

current

0%15%30%45%60%

Top 3 customers combined %

0% — Diversified

current

0%25%50%75%100%

Recurring Revenue %

—

current

0%25%50%75%100%

Your highest-ROI improvements, ranked

Targets reflect conservative top-quartile achievement for HVAC businesses over a typical 24-month advisor-led plan. Sourced from public industry research (ServiceTitan 2024 contractor benchmarks + ACCA reports). Your specific situation may warrant different targets — discuss with your advisor.

Valuation Scenario

Top Improvement Opportunities

Engine-computed impact of each improvement applied one at a time from today's baseline of $1,306,819 — the same targets and engine as the interactive planner. Effects compound when combined, so the impacts do not simply add.

#	Action	Est. Impact
1	Reduce key person dependency to Low	+$463,665
2	Reach top-quartile HVAC growth (12%)	+$191,348
3	Diversify customer base (no single customer >10%, top 3 <30%)	+$70,308
4	Reach top-quartile HVAC recurring revenue (50%)	+$42,191

Use the interactive Valuation Scenario Planner at https://valueai.pro/sample-report/solo to model specific scenarios in real time.

Appendix

Methodology & Calculations

All figures derived from data
provided at time of submission

How this valuation was produced. Every number in this report is computed by a deterministic financial engine using the formulas shown in this appendix — DCF, market multiples, and asset-based methods with explicit risk adjustments. AI is used only to write the narrative commentary; it does not calculate, adjust, or influence any valuation figure. The industry multiple table is maintained in-house, calibrated against BizBuySell-reported small-business transactions (~9,500 sales) and cross-checked against business-appraiser reference guides (conservative figure taken on disagreement); industry benchmarks cite their sources in the relevant sections. The risk-free rate is fetched live from Federal Reserve (FRED) data at generation. Every adjustment schedule the engine can apply is disclosed in full in section 6b.

1 · Seller's Discretionary Earnings (SDE)

SDE represents the total economic benefit available to a working owner-buyer. It reflects earnings before any owner pay (for this entity type, owner pay is not a deducted expense, so net profit already carries the full owner benefit) and adds back personal expenses run through the business so the valuation reflects true earning power regardless of how the owner chooses to pay themselves.

Annual Revenue	$1,200,000
Total Business Expenses	− $960,000
Net Profit	$240,000
Owner draws/distributions — informational: not added back (draws are not a deductible expense for this entity type, so net profit above already includes this money)	$140,000
Reported SDE (net profit — owner pay was not a deducted expense, so there is nothing to add back)	$240,000
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)	$311,000

Add-backs are personal/discretionary expenses run through the business that buyers add back when assessing true earning power. Recurring add-backs apply to historical years for trend analysis at their current-year amounts (a stated stability assumption — a constant shift moves all years equally and barely affects trend or volatility). One-time add-backs are attributed to the year each occurred: current-year items normalize valuation SDE; prior-year items normalize that year's historical SDE so a single unusual event doesn't read as earnings volatility. Add-back amounts are as reported by the submitter; buyers typically require documentation for each add-back in diligence. Rent normalization adjusts SDE to reflect what an arms-length tenant would pay (rent paid to a related entity owned by the seller), so the operating-business value reflects true earning power independent of who owns the real estate.

Owner-compensation basis. Owner pay is added back only when it was deducted as a business expense in arriving at net profit. For a sole proprietorship / single-member LLC, owner draws are not deductible expenses — net profit already reflects the owner's full economic benefit — so no compensation add-back is applied.

1b · Earnings History & Volatility

Buyers value earnings predictability. The 3-year SDE history below shows the consistency of earning power. Prior-year SDE applies the current year's owner compensation, recurring add-backs, and rent normalization unchanged to prior years (consistency assumption — only prior-year net profit is collected); one-time add-backs apply only to the current year.

2 years ago — Normalized SDE	$261,000
1 year ago — Normalized SDE	$286,000
Current year — Recurring SDE (excludes one-time add-backs)	$311,000
Earnings consistency (coefficient of variation)	7.1% — stable

Earnings have been steady (CV under 10%) — no additional volatility risk premium is applied. Buyers value predictable earnings. CV = population standard deviation across the three years ÷ mean; the 10% threshold and the premium schedule (+0.1 point per CV point above 10%, capped +2 points) are fixed engine conventions.

2 · DCF Discount Rate — Build-Up Method

The discount rate represents the return a buyer would require to justify purchasing this business, given its risk profile. Calculated using the standard build-up method.

Risk-free rate (10-yr U.S. Treasury — FRED series DGS10)	4.55%
Equity risk premium	5.50%
Small company premium	5.00%
▲ Key person dependency risk (High)	+5.00%
▲ Customer concentration risk (Moderate — top 16%, top 3 32%)	+1.00%
● Recurring revenue reduces risk (35% recurring)	−0.70%
Total Discount Rate	20.4%

Components are shown at two decimals and computed on unrounded values; the final rate is rounded to the nearest 0.1 point and bounded to a 15%–40% range — summing the rows reproduces the total exactly within that final rounding step. Sources: the risk-free rate is fetched at generation (10-yr U.S. Treasury constant-maturity yield). The 5.5% equity risk premium and 5.0% small-company premium are fixed engine conventions consistent with long-horizon U.S. historical equity-premium estimates and micro-cap/Main-Street size-premium studies used in build-up practice (Kroll/Duff & Phelps and Damodaran long-run figures cluster in these ranges); they are judgment-calibrated, not fetched from a live dataset. The schedules behind every company-specific line above (key person, concentration, tenure, volatility, recurring) are disclosed in full in section 6b below.

3 · Discounted Cash Flow (DCF) Valuation

Projects future earnings and discounts them to present value using the risk-adjusted discount rate. Growth rate: 6.0% | Terminal growth rate: 2.5%

What is being discounted. The projected cash flow is SDE — the pre-tax total owner benefit — grown at the rate above. It is not tax-, capex-, or working-capital-adjusted free cash flow. Discounting the owner-benefit stream parallels the SDE-multiple convention used in the market method; it is a Main-Street convention, not a formal net-cash-flow-to-equity DCF, and is one reason the DCF figure typically runs above the market-multiples range. The triangulation weights (section 6) temper this: the DCF carries 40% of the blend.
Where the growth rate comes from. 75% weight on your historical revenue CAGR (6.9%) + 25% weight on the HVAC base rate (5.0%), bounded to a −10%…+15% range and rounded to the nearest whole percent.
Terminal assumptions. The 2.5% terminal growth rate is a fixed convention approximating long-run U.S. inflation/GDP trend. The terminal value contributes 47% of the total DCF value. Projections use a 5-year horizon with year-end discounting.

Period	Projected SDE (owner cash flow)	Present Value
Year 1	$329,660	$273,804
Year 2	$349,440	$241,057
Year 3	$370,406	$212,226
Year 4	$392,630	$186,843
Year 5	$416,188	$164,497
Terminal Value (PV)	—	$941,951
DCF Value		$2,020,378

4 · Market Multiples Valuation

Applies transaction multiples for the HVAC industry. The industry baseline is adjusted step by step below — each row shows the adjustment applied AND the resulting range after that step, which is the engine's exact computation path (ranges are rounded to 0.1x after every step, so the staged ranges are authoritative; recomputing from the factors alone can differ by up to 0.1x per step).

Industry baseline SDE multiple range	2.0x – 4.5x
Industry baseline revenue multiple range (cross-check basis)	0.30x – 0.70x
Revenue trend adjustment (additive) — +0.17x (2.5 × 6.9% CAGR, capped ±0.5x)	→ 2.2x – 4.7x
Key person risk adjustment (multiplicative) — ×0.70 (−30%)	→ 1.5x – 3.3x
Customer concentration adjustment (multiplicative) — ×0.934 (−6.6%)	→ 1.4x – 3.1x
Recurring revenue premium (additive) — +0.42x (additive)	→ 1.8x – 3.5x
Final adjusted SDE multiple range	1.8x – 3.5x
SDE-based value range (final SDE multiple × $311,000)	$559,800 – $1,088,500
Revenue-based cross-check (final revenue multiple 0.29x–0.56x × $1,200,000)	$348,000 – $672,000
Market Multiples Value (SDE-based, primary)	$559,800 – $1,088,500

SDE-based multiples are the primary basis for triangulation; the triangulation uses the midpoint of the final range. Revenue multiples follow the same multiplicative adjustments, with a recurring premium of +0.20x × recurring fraction (here +0.07x) capped at +0.20x and 0.01x per-step rounding, and are shown only as a cross-check. The adjustments above are applied once within this method — not re-applied to the value range shown.
Provenance: the industry multiple table is maintained in-house, calibrated against BizBuySell-reported small-business transactions (~9,500 sales across 100+ industries) and cross-checked against business-appraiser reference guides, taking the more conservative figure where sources disagree. Range endpoints represent the typical reported transaction range for the industry, not observed minimum/maximum, and are not stratified by deal size within the industry.

5 · Asset & Goodwill Value (conservative cross-check)

A hybrid cross-check combining the tangible assets collected with a conservative, earnings-derived goodwill estimate. Because the goodwill line is derived from SDE, this is not a pure asset/cost approach: only the tangible portion ($230,000) would hold if earnings collapsed, while the goodwill component moves with earning power. It serves as the conservative anchor in the triangulation rather than a liquidation floor.

Equipment value	$185,000
Inventory value	$45,000
Goodwill estimate (2x SDE)	$622,000
Real estate — excluded, sold separately (figure estimated at 60% of annual revenue — no property value provided)	$720,000
Asset & Goodwill Value	$852,000

Scope: this method includes only the asset categories this analysis collects — equipment, inventory, real estate, and valued IP — plus the goodwill estimate. Cash, accounts receivable, work in progress, and liabilities are not collected and are excluded, consistent with the Basis of Value statement.

Real estate (estimated $720,000 at 60% of annual revenue — no property value was provided) is owned by the seller and being sold separately. It is excluded from this method's total because the buyer of the operating business will not acquire the property; the property's value accrues to the seller through the separate real estate transaction.

Goodwill multiplier calibrated against BizBuySell 2025 small business transaction data (~9,500 reported sales across 100+ industries). For HVAC businesses, 2x SDE reflects typical residual goodwill after tangible assets are accounted for separately.

6 · Triangulated Valuation

The final valuation is a weighted average of the three methods, with weights reflecting the reliability of each method for this business profile.

DCF value	40% weight	$2,020,378
Market multiples midpoint	45% weight	$824,150
Asset & goodwill value	15% weight	$852,000
Triangulated Value		$1,306,819

Estimated range: $1,110,796 – $1,568,183 · All values reflect data as submitted. See disclaimer below.

Why these weights. Market multiples carry the largest weight (45%) because businesses of this size trade primarily on comparable-sale evidence — what buyers have actually paid for similar earnings. DCF (40%) is the forward-looking check: it rewards durable growth but is sensitive to projection assumptions, so it is not weighted first. The asset & goodwill method (15%) acts as the conservative anchor rather than a primary driver for a profitable operating business.

The weights are fixed conventions by business profile, not tuned per business: 40% / 45% / 15% (DCF / multiples / asset) for any business with positive SDE, shifting to 10% / 20% / 70% when SDE is zero or negative (an asset-reliant profile). They are a judgment convention reflecting how Main-Street businesses are actually priced; they are not derived from a dataset.

6b · Adjustment Schedules & Engine Conventions

The full schedule behind every adjustment the engine can apply — including levels that did not apply to this business — so any figure in this report can be traced to its rule. These schedules are fixed engine conventions, calibrated to the middle of appraiser-defensible ranges; they are applied identically to every report.

Factor	Effect on market multiples	Effect on DCF discount rate
Key person dependency	Low ×1.00 · Moderate ×0.85 (−15%) · High ×0.70 (−30%)	Low +0 · Moderate +3.0 pts · High +5.0 pts
Customer concentration (continuous curve on top-1 and top-3 %)	0% discount when fully diversified, ramping to −3% at top customer = 10%; −3% to −15% as top-1 runs 10→30% or top-3 runs 30→50% (larger of the two governs); −15% and steepening beyond; capped at −30%	Same curve shape at smaller magnitude: +0.5 pt at top-1 = 10%, +2.0 pts at 30%, capped at +5.0 pts; the computed premium is rounded to the nearest 0.1 pt before entering the build-up
Recurring revenue	+1.20x × recurring fraction on SDE multiples (50% recurring → +0.60x), capped +1.20x; revenue multiples +0.20x × fraction, capped +0.20x	−2.0 pts × recurring fraction (10% recurring → −0.2 pt), capped −2.0 pts
Revenue trend (CAGR)	±2.5 × CAGR on SDE multiples (e.g. +10% CAGR → +0.25x), capped ±0.5x; revenue multiples ±0.75 × CAGR, capped ±0.15x	— (trend affects the DCF via the growth rate instead)
Business tenure	— (tenure scales the goodwill estimate: ×0.6 at 2–4 years, ×0.2 under 2 years)	+3.0 pts under 3 years · +1.5 pts under 5 years · +0 at 5+
Earnings volatility	—	CV ≤ 10%: none · above 10%: +0.1 pt per CV point, capped +2.0 pts
Industry risk	— (already embedded in the industry baseline multiples)	+2.0 pts where the industry baseline SDE multiple floor is under 2.0x (higher-risk industries) · −1.0 pt where it exceeds 3.0x · bounded −2/+4 pts

Other conventions: Owner compensation is added back to net profit only when it was deducted as a business expense in arriving at net profit — W-2 salary (S-Corp/C-Corp) and partner guaranteed payments qualify; sole-proprietor draws, partner draws, and S-Corp shareholder distributions do not (they are already inside net profit) — the basis applied to this report is stated in section 1. DCF growth rate = 75% × historical revenue CAGR + 25% × industry base rate when history exists (industry base with tenure bonuses of +1 pt at 5 and 10 years otherwise), +2 pts when valued proprietary IP is present, bounded −10%…+15%, rounded to the nearest whole percent. Terminal growth fixed at 2.5%. Discount rate bounded 15%–40%, rounded to 0.1 pt. Multiples rounded to 0.1x (SDE) / 0.01x (revenue) after each adjustment stage. Real estate owned but not valued by the submitter is estimated at 60% of annual revenue and flagged as an estimate wherever shown. Triangulation weights: 40/45/15 (DCF/multiples/asset) with positive SDE; 10/20/70 otherwise. Reported range: −15%/+20% band around the triangulated midpoint (see Range & Sensitivity below).

Range & Sensitivity

How the range is set. The estimated range of $1,110,796 – $1,568,183 applies a fixed −15% / +20% band to the triangulated midpoint of $1,306,819. This band is a reporting convention — chosen to reflect the typical spread between preliminary estimates and realized Main-Street transaction outcomes — it is not computed from the scenario table below, and it is not a statistical confidence interval. The band gives more room to the upside because the midpoint is deliberately conservative: the multiples are calibrated to the conservative end of reported transaction ranges and the blend tempers the DCF, so competitive sale processes resolve above the midpoint more often than diligence resolves below it.

For orientation, assumption movements of roughly this magnitude would drive the value toward each end of the band (movements shown as internally consistent packages — the value-lowering case pairs slower growth with a higher discount rate and softer multiples):

Assumption	Base Case	Value-Lowering Case	Value-Raising Case
Growth rate	6.0%	3.0%	9.0%
Discount rate	20.4%	22.4% (higher rate = lower value)	18.4%
Market multiples	Risk-adjusted base	−5% contraction	+5% expansion

Discount-Rate Sensitivity

The company-specific premiums in the discount-rate build-up are professional judgment calls. This table shows what a two-point disagreement on the rate is worth — and why the triangulated value moves far less than the DCF alone (DCF carries 40% of the blend).

Discount rate	DCF value	Triangulated value
2 points lower (18.4%)	$2,282,597	$1,411,706
Base rate (20.4%)	$2,020,378	$1,306,819
2 points higher (22.4%)	$1,811,267	$1,223,174

The Discount-Rate Sensitivity table above is genuinely recomputed by the engine (same formula, same rounding) — it is the exact response to a ±2-point disagreement on the rate. The assumption table is illustrative orientation only. Risk adjustments for key person dependency and customer concentration are already embedded in the base-case multiples and discount rate; the band is not an additional risk adjustment.

Methodology note — how risk is priced across the two earnings methods. Measurable risks (key person, concentration, recurring revenue) are priced in both earnings methods, each within its own framework: as direct multiple adjustments in the market approach (the convention of transaction-multiple analysis, and visible to the reader), and as build-up premiums in the DCF discount rate (the convention of income-approach practice — the company-specific risk premium, CSRP). Because the two methods are then blended, each risk affects 85% of the triangulated weight through these two parallel channels; the schedules in section 6b were calibrated with that structure in mind, sized toward the conservative middle of appraiser-defensible ranges rather than stacked at full strength in both places. A formal USPAP-compliant appraisal would typically choose a single channel per method and document the CSRP judgment; the approaches differ in form but are calibrated toward similar total effects. Consult a credentialed appraiser (ABV, ASA, CVA, or equivalent) for any transaction, dispute, tax filing, or other situation requiring a defensible valuation.

Appendix

7 · Submitted Inputs

All inputs provided at the time of submission. These are the exact values used to generate this report. If any figure appears incorrect, contact support@valueai.pro to request a corrected report.

Business Overview
Business name	Briggs Mechanical Services LLC
Industry	HVAC
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	$960,000
Net profit	$240,000
Owner compensation (salary / draws / guaranteed payments)	$140,000 — not a deducted expense; informational, not added back
Owner add-backs (sum of recurring + current-year one-time)	$47,000
Rent normalization adjustment	+$24,000
Normalized SDE (used for valuation)	$311,000
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)	$190,000 → $215,000
Earnings volatility (CV)	7.1% (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	4.55% (10-yr U.S. Treasury — FRED DGS10, fetched at generation)
Discount rate (calculated)	20.4%
Report generated	August 26, 2026

Disclaimer

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.

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