Latest / The Buyer & Seller Podcast with Fexingo: Business Brokers, Exits, and Private Sales Explained / How a Handyman Business Sold at 70x EBITDA with Recurrence Data
Transcript
- Lucas: So a handyman business — one guy, a van, maybe a couple of part-timers — just sold for 70 times EBITDA. Luna: Seventy times? That is not a typo? Lucas: Not a typo. The business did about $400,000 in revenue, maybe $150,000 in EBITDA. And the buyer paid around ten and a half million dollars. Luna: Okay, I need to understand this. Because a handyman business is about as low-tech, low-barrier as it gets. What made it worth that kind of multiple? Lucas: It all came down to data. Specifically, recurrence data. The owner had kept meticulous records going back seven years — every job, every customer, every address, how often they called, what they paid, how long the service took. Luna: So it wasn't the business itself, it was the spreadsheet. Lucas: Pretty much. The buyer — a small family office — looked at that data and saw something rare: a service business with predictable, recurring demand. 60% of customers used them at least three times a year. 30% used them every six to eight weeks. That's a subscription-like pattern in a non-subscription business. Lucas: And here's the thing — if these conversations have moved your work forward in some small way, maybe helped you think differently about your own business, it's worth mentioning that listener support is honestly what keeps this show ad-free and independent. Luna: Yeah, a couple of dollars a month genuinely makes a real difference. It's buy me a coffee dot com slash fexingo. Lucas: And it's because of that support that we can do deep dives like this without worrying about sponsors. So back to the handyman deal — the owner didn't just have the data, he knew how to present it. Luna: What did the data room look like? Was it just a folder of invoices? Lucas: No, it was much more structured. He had a clean Excel file with columns for customer name, address, service type, date, ticket value, and a flag for repeat versus new. He also mapped every address on a heat map showing density — essentially proof that his routes were efficient and that customers were clustered. Luna: So he was basically selling a route business, not a handyman business. Lucas: Exactly. The buyer wasn't buying a guy with a van. They were buying a network of recurring customer relationships in a specific geographic area. The physical work was almost incidental. Luna: But 70 times — that still seems high. Even if the recurrence is strong, what's the growth narrative? I mean, it's one guy, a limited service area. Lucas: The buyer's thesis was that they could systematize and scale. They planned to hire a general manager, add more vans, and expand the service area incrementally. The data gave them confidence that the demand pattern would hold in adjacent neighborhoods. Lucas: They also ran a scenario where they kept the same customer base but added two more service categories — like gutter cleaning and holiday light installation — and projected that could double revenue without adding many new customers. Luna: That makes sense. Cross-selling to an existing, loyal base is much cheaper than acquiring new customers. Lucas: Right. And the multiple starts to look less crazy if you assume the buyer can double EBITDA in three years. At the current EBITDA, 70x is rich. But at double the EBITDA, the effective multiple drops to 35x — which is still high, but more defensible. Luna: Still, 35x for a handyman business? That's not typical. What do normal multiples look like for this space? Lucas: Typical small service businesses — handymen, cleaners, landscapers — sell for 3 to 6 times EBITDA. Maybe 8 if they have some recurring contracts. This deal is an extreme outlier. Luna: So what made this buyer willing to pay such a premium? Was it just the data, or was there something else? Lucas: I think there were three factors. First, the buyer had a specific thesis about service businesses with high recurrence — they believed these were undervalued. Second, the owner was willing to stay on for two years as a consultant, which reduced transition risk. And third, the buyer used an earnout structure that tied a big chunk of the purchase price to hitting retention and revenue targets. Luna: So the owner only gets the full 70x if the business actually performs post-sale. Lucas: Exactly. The base price was more like 40x, with an earnout that could push it to 70x if certain milestones were met. That's a way for the buyer to pay for future performance rather than past results. Luna: That seems like a smart structure. It aligns incentives. But it also means the owner isn't really cashing out fully — they're still working for that upside. Lucas: True. But for a business owner in their late 50s, it's a way to transition gradually. And the earnout was based on things the owner could control — customer retention, service completion rates, not revenue growth. Luna: I want to go back to the data room. What can other small business owners learn from this? Is it just about tracking everything? Lucas: Partly, but it's also about how you present it. The owner had a one-page summary that showed: total customers, active customers in the last 12 months, repeat rate, average ticket size, and a map. That's it. Three numbers and a map. Luna: Simple but powerful. And I imagine the buyer's eyes lit up when they saw that map. Lucas: Yeah, the density story is what sold it. The owner had 80% of his jobs within a five-mile radius. That means a single van can do multiple jobs a day with minimal drive time. That's efficiency, and it's something buyers love because it's scalable. Luna: So if I'm a handyman or a plumber or an electrician listening to this, what's the one takeaway? Lucas: Start tracking your recurrence now. Not just revenue, but how often each customer comes back. If you can show that 40, 50, 60% of your customers are repeat buyers within a year, you're not selling a service — you're selling a subscription in disguise. Luna: And that's what gets the high multiple. Lucas: Exactly. The business itself might be unsexy, but the data makes it sexy to a buyer. And in a market where capital is looking for predictable cash flows, that recurrence data is gold. Luna: So do you think we'll see more of these outlier multiples in low-tech service businesses? Lucas: I think so, as long as owners start keeping better data. The buyer in this case told me they're actively looking for similar deals — handymen, pest control, landscaping, even mobile dog grooming — but only if the recurrence data is solid. Luna: Interesting. So there's a whole class of businesses that are basically overlooked because they don't look like tech, but they have the underlying economics of a recurring revenue model. Lucas: That's exactly the opportunity. The question is whether owners can get organized enough to capture that value. This one guy did, and it paid off to the tune of ten million dollars. Luna: And a 70x EBITDA multiple. That's the kind of number that makes you rethink what your business is really worth. Lucas: Yeah, it's a reminder that value isn't always in the tangible assets. Sometimes it's in the data you've been collecting all along without realizing it. Luna: Alright, let's leave it there. Next time we'll look at another deal where the data told a different story. Lucas: Sounds good. Until then, start tracking.