Trades businesses are commonly bought and sold in Australia , but with some difficulty and at low price earnings multiples.
Why?... well there are some barriers to entry to ownership of a trades business which disqualify most business buyers. This is because a buyer usually needs a qualification/ skill which takes four or five years to obtain via an apprenticship.
Secondly it is common that many tradesmen in their younger years who may be interested in owning a trades business such as a plumbing firm or an electrician, do not have the collateral or financial wherewithall to actually fund and buy a decent trades business. In other words they cannot afford it!
The third factor or market force at play in trade related businesses is that in the boom states of Western Australia, Queensland and the Northern Territory there is exceptionally high demand for skilled tradesmen and the wages they are capable of earning are very high indeed. It is not unheard of for a skilled welder working in the West Australian resource sector to be earning one hundred and fifty thousand to two hundred thousand dollars a year.
Sellers of trade related businesses need to understand that when selling and pricing their trade businesses for sale that they are competing with the job market for the attention of tradesmen who may be prospective buyers.The trade business for sale has to put forward a proposition which beats the proposition of the buyer not buying a business but instead remaing in their wage and salary position.
Remember, the tradie may have no worries , earn more and work less hours by remaining an employee, wheras he may have more worries actually being the boss!Therefore he needs to have a true enterpeneurial spark to make the giant leap from a trade business employee to a trades business owner!