What Really Drives Multiples in Trades Businesses

What Really Drives Multiples in Trades Businesses

When you’re looking at trades like HVAC, plumbing, or electrical, one of the most common questions is: What multiple does this business trade at? Most people default to “around three times cash flow.” It sounds simple—but it’s also where a lot of deals go wrong. In Episode 3, host Darren Mize breaks down what really drives multiples in trades businesses—and why they’re not rules, but outcomes. Using real-world examples, he explains how two businesses with identical revenue and cash flow can command very different multiples based on one key factor: risk. From owner dependence to operational structure, this episode walks through how the market prices risk into every deal—and why understanding that is critical to getting value right. Have a question you want us to cover? Send it in for a future episode. Each quarter, we’ll draw from submitted questions, and one listener will receive a pair of headphones. Thanks for listening— at GCF, We keep small business moving®. www.gvalue.com [http://www.gvalue.com/] | LinkedIn [https://www.linkedin.com/company/gcf-valuation]

Inventory and Working Capital

When you’re looking at a deal, two questions create more confusion than almost anything else: Is inventory included in the value—or added on top? And does working capital transfer with the business—or does the seller keep it? If you’ve asked three professionals and gotten three different answers, you’re not alone.  In Episode 2, host Darren Mize simplifies one of the most misunderstood areas of deal structure in small business and lower middle market transactions.  Have a question you want us to cover? Send it in for a future episode [dmize@gvalue.com]. Each quarter, we’ll draw from submitted questions, and one listener will receive a pair of headphones. Thanks for listening— at GCF, We keep small business moving®. www.gvalue.com [http://www.gvalue.com/] | LinkedIn [https://www.linkedin.com/company/gcf-valuation]

An Introduction to Valuation Blueprint

Welcome to Valuation Blueprint, a podcast built for the people who keep small business transactions moving—business brokers, M&A advisors, buyers, sellers, SBA lenders, and business owners. In this kickoff episode, host Darren Mize explains why the show exists and what you can expect each season. After nearly 28 years in small business transactions, Darren has seen thousands of deals—both the ones that close smoothly and the ones that break down.  Coming this season: We’ll break down why deals fail after LOI, cash flow and add-back misunderstandings, working capital and inventory issues, market intelligence and red flags, misapplied valuation multiples, and practical ways to keep good deals moving (and identify bad ones early). Next episode: Working Capital & Inventory—what’s included, what’s excess, and why it matters for value, pricing, and financing. Have a question you want us to cover? Send it in for a future episode [dmize@gvalue.com]. Each quarter, we’ll draw from submitted questions, and one listener will receive a pair of headphones. Thanks for listening— at GCF, We keep small business moving®. www.gvalue.com [http://www.gvalue.com/] | LinkedIn [https://www.linkedin.com/company/gcf-valuation]