What are all my options besides selling to PE?

There are more ways to exit a small business than the letters in your mailbox suggest. Private equity gets the headlines, but PE-backed groups run only about 0.9% of US HVAC and plumbing contractor locations. Most owners will sell to someone else: a competitor down the road, a person buying their first company, a foreman, a son or daughter, or their own employees. Some will close the doors on their own terms and sell the trucks.

This guide puts all seven paths side by side, in plain words: who tends to pay the most, who is most likely to keep your people, and how long each one takes. None of them is right for everyone. The point is to know your choices before someone else frames them for you.

The seven paths at a glance

This table is our judgement from the sources on this page, not a published ranking. Your own company can land differently.

1. Sell to a PE platform as an add-on

A PE-backed platform buys your company and bolts it onto a bigger group. These buyers pay most for companies with managers in place, recurring revenue and clean books. Axial reports HVAC letters of intent from 2.1x to 10.9x EBITDA, a very wide range, and roofing letters from 2.8x to 7.0x EBITDA with 8.3 months on average to close. Size matters: add-on buyers generally look for about $1M or more of EBITDA.

The price often comes in pieces. Leap Partners, for one, describes a 45-day process with money up front and substantial earnouts. Redwood says its owners keep equity, which means part of your price is rolled into the new group. Owners worry about what happens next, and one HVAC owner asked whether a PE buyer would raise prices and push techs to sell more. Ask for references from owners they bought two years ago. Our PE outreach guide has the questions.

2. Sell to a local competitor

A competitor in your area, or one from a nearby town that wants your market, buys your customer list, crews and name. They know the trade, so diligence can be faster and simpler. They may pay well for your techs and service base because they can't hire fast enough. They may also cut overlap, such as a second office or a dispatcher.

This is the path many owners mean when they say they want to sell "to someone local who will keep it going", which is a question owners ask on trade forums. The hard part is confidentiality: you are showing your books to a rival. Use an NDA and share the most sensitive numbers last.

3. Sell to an individual buyer with an SBA loan

This is the most common buyer for small companies. The IBBA found first-time buyers made 46% and serial entrepreneurs 32% of Main Street acquisitions in Q4 2025. Many borrow through the SBA 7(a) program, where the maximum loan is $5 million.

These buyers pay what the earnings can support on a loan, so the price tracks SDE. BizBuySell's 2021 to 2025 median sold multiple is 2.58x SDE for HVAC and 2.24x SDE for plumbing. Two SBA rules shape your deal. Since June 2025 the buyer needs a 10% equity injection, and a seller note only counts toward it if it is on full standby for the life of the loan. And in a full change of ownership you can stay only as a paid consultant, for 12 months under SOP 50 10 8 and 24 months under SOP 50 10 8.1, per Prencipe.

4. Sell to a key employee or a group of them

Your GM, office manager or best foreman buys you out, often with a team. They know the customers and the crews, so the handover is the smoothest of any path. Owners ask about this often. The catch is money. Few employees have the cash, so you usually carry a large seller note, or they get an SBA loan with your note on standby. You are betting your retirement on them running it well.

Plan it early. One plumbing podcast claims a 15% to 20% valuation lift from incentive plans put in 12 to 24 months before a sale; that is their claim, not a study. See selling to employees.

5. Hand it to family

A child or relative takes over and pays you over time, or you gift part and sell part. This keeps the name and your people. It works when the successor already runs the day, holds or can earn the license, and the family agrees on what is fair to siblings who are not in the business. Treat it as a real sale with a written price and terms. See selling to family.

6. Sell to an ESOP

An employee stock ownership plan is a qualified retirement plan that buys company stock for your employees. The plan pays a price set by an independent appraisal, often financed by a bank and a seller note. Your people keep their jobs and become owners over time. ESOPs carry setup and yearly legal, appraisal and administration costs, so they tend to suit larger companies with steady profits and a management team. In our judgement, they also deserve a look in heavily union markets, where residential platforms rarely buy union commercial shops. Ask an ESOP attorney whether your size makes sense before you spend money on a study.

7. Wind down in an orderly way

If no buyer appears, you can stop taking new work, finish your jobs, honor warranties, collect receivables, sell the trucks and equipment, and close. Gallup found owners 55 and older are more likely to plan to close (13%) than younger owners (4%). You get the value of the assets, not the goodwill. A middle path some owners ask about is handing it to employees for a royalty or selling the phone number and customer list to a competitor. Help your best people land jobs with good shops before you announce it.

How to choose

Ask yourself three questions:

1. How much do I need at closing? If you need most of it on day one, PE, a competitor or an SBA buyer fits better than an employee or family deal. Run the retirement gap tool to see your number.
2. Who could run it without me? If nobody can, every path pays less, and an employee or family path may be the only one that works.
3. How long do I want to stay? Some paths need you for months, others for years.

Start at least three years ahead if you can. That keeps more than one path open.

Common mistakes

• Only talking to the buyer who called. One offer tells you nothing about what other paths would pay.
• Comparing headline prices. A higher price paid half in an earnout can be worth less than a lower all-cash price. See cash at closing.
• Assuming family or staff will pay full price in cash. They usually pay over years, which carries risk.
• Waiting until you are worn out. A tired owner loses options. The wind-down becomes the default.
• Forgetting the license. Every path needs a qualifier the day after closing.

Questions to ask your CPA, attorney or broker

1. Which of the seven paths are realistic for a company our size and earnings?
2. What would I net after tax on each path, with cash now and payments later?
3. If I carry a seller note, how is it secured, and what happens if the buyer misses payments?
4. Would an ESOP make sense at our size, and what would a feasibility study cost?
5. Who would qualify the license after closing on each path?
6. If we wind down, what do we owe on warranties, leases and loans, and how long should the company stay open?

Sources

1. Fulkerson Advisors, Private Equity in HVAC and Plumbing: 0.9% of Contractors
2. Axial, HVAC M&A Activity and Market Trends
3. Axial, Roofing M&A Activity and Market Trends
4. Raincatcher, Private Equity in HVAC
5. Leap Partners, Our Process
6. Redwood Services, home page
7. Reddit r/ProHVACR, Should I sell the business?
8. Reddit r/Plumbing, Looking to sell company in MA. How?
9. IBBA and M&A Source, Market Pulse Q4 2025
10. SBA, 7(a) loans
11. BizBuySell, HVAC Business Valuation Multiples and Financial Benchmarks
12. BizBuySell, Plumbing Business Valuation Multiples and Financial Benchmarks
13. CapBench, SBA SOP 50 10 8 rule changes 2025 to 2026
14. Prencipe International, SBA caps how long your seller can stay
15. ACHR News, Financial Experts Offer Insight Into Planning a Proper Exit
16. PM Magazine, Retention: The Best Exit Strategy
17. IRS, Employee stock ownership plans (ESOPs)
18. Gallup, Most Small-Business Owners Lack a Succession Plan
19. Reddit r/smallbusiness, What are my options if I can't sell my business?
20. Roofing Contractor, What Contractors Need to Know About Private Equity in 2025
21. Chisel Industries, How to sell a plumbing business
22. First Page Sage, HVAC EBITDA and Valuation Multiples 2025
23. Contracting Business, The 12 Essential Steps for a Profitable Contracting Exit Strategy, Part I