At first glance this electrical contracting company looks like a solid deal. But once you account for licensing requirements, the economics change quickly.
This electrical contracting business has been operating for over 7 years in South Florida and provides services across residential, commercial, and industrial projects. The company also performs work for government agencies and municipalities, which can provide steady contract opportunities.
Deal Snapshot
Now let's run this through a typical SBA scenario with 10% down.
SBA Scenario (10% Down)
On paper this looks like a healthy deal with strong coverage. But that assumes the buyer can operate the business themselves.
The Licensing Problem
Electrical contracting businesses in Florida require a licensed qualifier. If the buyer does not personally hold the license, they must hire or partner with someone who does.
Assuming a $100,000 licensed operator salary, the economics change significantly.
Adjusted Scenario (Operator Required)
What Stands Out
- Diverse service mix: The company handles residential, commercial, and industrial projects.
- Government work: Existing public sector contracts can provide stability and credibility.
- Growing industry: Electrical demand continues to grow with new construction, EV charging infrastructure, and smart-home installations.
Potential Risks
- License dependency: Buyers without an electrical license must hire a qualified operator.
- Compressed margins: After paying a licensed operator and debt service, only about $64K remains.
- Limited DSCR cushion: With DSCR around 1.44, even small revenue fluctuations could create pressure.
BizHub Verdict
This deal scores a 6.1 / 10. The business itself appears solid, but licensing requirements significantly reduce cash flow for absentee buyers. For a licensed electrician looking to own their own company, this could be a strong opportunity. For investors without a license, the economics become much tighter.
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