What Is a Restoration Company Worth? How to Build a Sellable Shop
PE is buying restoration shops, but they pay for the business, not the operator. What actually sets your multiple, the four things a buyer checks, and why growing revenue can lower your sale price.
Enterprise value · same revenue
Buyers pay for the business, not the operator.
Most restoration owners think they’re building a business. A lot of them are building a very stressful job that happens to throw off cash. The difference doesn’t show up until you try to sell, and by then it’s usually too late to fix.
Private equity is buying restoration shops aggressively right now. That’s good news and a warning. The good news: there are real buyers at real multiples. The warning: they’re disciplined, and they pay for one thing above all else, a business that keeps running when you leave the room.
What a restoration company is actually worth
Buyers don’t value your revenue. They value your adjusted EBITDA, earnings after you add back the owner’s discretionary spend and one-time items, and then they apply a multiple. Two shops doing the same $6M can be worth wildly different numbers, because the multiple is set by risk, and the single biggest risk a buyer prices is you.
A shop where the owner writes the estimates, holds the carrier relationships, and makes every real decision is a shop that loses its engine the day the owner leaves. Buyers know it, so they either discount the multiple hard or structure the deal to trap you inside for years. The owner-optional shop, same revenue, same margin, gets the premium and the cleaner exit. That spread is the whole game.
The four things a buyer actually checks
- Clean, defensible books. Can you show per-job margin, AR aging, and supplement capture without rebuilding it from memory? Diligence is where soft numbers die. If your financials can’t survive a buyer’s accountant, the multiple drops or the deal does.
- Recurring, transferable revenue. TPA and carrier programs that are tied to the business and your systems, not to your personal cell phone, are worth far more than relationships that walk out with you.
- Margin that holds without heroics. A 52% recon margin that depends on the owner personally scoping every Cat 3 isn’t durable. One that holds because the system holds is.
- Owner-dependence, quantified. The lower the percentage of revenue that routes through you, the higher the multiple. It’s the number that turns a job into an asset.
Why “just grow revenue” backfires
Owners assume bigger top-line means bigger sale price. Not if the growth deepens your dependence. A $3M shop that runs without the owner is often a better acquisition than an $8M shop the owner can’t step out of, because the buyer is buying the future without you in it. Growing revenue while staying the bottleneck just builds a bigger job, and a bigger job that’s harder to sell. This is the same trap behind the ceiling most $1M–$15M shops hit.
How you build the premium
You make yourself optional, on purpose, before you need to. Get the numbers visible so diligence is a formality, not a fire drill. Move the estimating, carrier comms, and AR off your desk and onto systems that don’t leave when you do. Document the playbook so a new operator can run it. None of that happens in the 90 days before a sale, it happens over the quarters before you ever take a call from a buyer.
That’s the work we do: pull the owner out of production without dropping margin and rebuild the books a buyer will pay for. Our founders have built and sold restoration companies, the framing isn’t theory, it’s what we did before we did it for anyone else.
Start Monday
Ask yourself one question honestly: if you stepped out for 90 days, what breaks? Write down every answer. That list is your dependence, and your dependence is your discount. Start moving the top three items off your desk now, long before you’re ready to sell, because the premium is built in the quarters of boredom, not the weeks of urgency.
Apply for a 30-minute Operating Diagnostic and we’ll tell you where your business is still a job, and what it’s costing your eventual multiple.
Keep reading
Read by an R360 operator-founder. Want one at your table? Apply for the diagnostic