Taking over a plumbing business: key points to analyse
Introduction
The plumbing sector represents a solid takeover opportunity for entrepreneurs. Demand is constant, needs are recurring and the market is barely exposed to economic cycles. But taking over a plumbing business requires an in-depth technical analysis that buyers from other sectors don't always understand.
Unlike other craft activities, plumbing relies on regular maintenance contracts, strict professional qualifications and expensive specialised equipment. The value of such a business depends as much on its customer base as on its technical skills and operating licences.
This guide supports you in evaluating a plumbing company before takeover. You'll discover the sector's specificities, the financial criteria to examine and the technical points requiring vigilance. From recurring contracts to team qualifications, through to the state of the vehicle fleet, every element counts to secure your investment.
Whether you're a plumber looking to develop your business or an entrepreneur changing careers, this checklist will help you ask the right questions and identify real opportunities amongst the available businesses.
📌 Summary (TL;DR)
Taking over a plumbing business requires analysing the customer base and maintenance contracts, verifying professional qualifications and authorisations, evaluating the technical team and equipment. It's also necessary to examine cost structure, margins, ongoing disputes and supplier relationships. A supported transition secures the transfer of skills and customer relationships.
📚 Table of contents
- The specificities of the plumbing sector
- Analysing the customer base and recurring contracts
- Verifying qualifications and authorisations
- Evaluating the team and technical skills
- Examining equipment and the vehicle fleet
- Analysing cost structure and margins
- Points requiring vigilance specific to the sector
- Preparing the transition and support
The specificities of the plumbing sector
The Swiss plumbing market benefits from stable demand, driven by a constantly growing property stock and significant renovation needs. Regulations are strict: drinking water standards, compliant sanitary installations, mandatory cantonal authorisations.
The sector faces a chronic shortage of qualified labour. Professional certifications (CFC) are essential to practise legally. This barrier to entry protects established businesses but complicates takeovers for non-technical profiles.
Analysing the customer base and recurring contracts
Examine the portfolio composition: private customers versus professionals (property management companies, trustees, businesses). Regular maintenance contracts represent the real value: boiler servicing, sanitary installations, periodic inspections.
These contracts generate predictable revenue and stabilise cash flow. Analyse the intervention recurrence rate and customer loyalty over a minimum of 3 years. A business with 40% recurring contracts presents less risk than a structure dependent on one-off interventions.
To deepen your evaluation of a customer portfolio, consult our guide on analysing customer portfolios in the craft sector.
Verifying qualifications and authorisations
Identify all mandatory certifications: CFC training certificate in sanitary installations, cantonal authorisations for drinking water works, gas certifications if the business works on heating installations.
Verify the transferability of these authorisations. In certain cantons, the buyer must personally hold the qualifications or employ a certified technical manager. If the current team possesses the skills, ensure their stability before the takeover.
Evaluating the team and technical skills
Analyse the structure: qualified craftsmen with CFC, apprentices in training, administrative staff. Average seniority reveals team stability and the quality of the social climate.
Identify dependence on the outgoing owner: does he alone hold key customer relationships? Does he master rare technical skills? Does he manage all operational aspects? Strong dependence requires a long and structured transition.
Our article on taking over a business centred on the founder details strategies to mitigate this risk.
Examining equipment and the vehicle fleet
Inventory specialised tools: welding machines, pipe inspection cameras, high-pressure unblocking equipment, crimping tools. Their condition and age determine immediate investment needs.
The commercial vehicle fleet represents significant capital. Verify mechanical condition, mileage and replacement planning. A new vehicle costs 40,000-60,000 CHF. These tangible assets weigh in the overall business valuation.
Analysing cost structure and margins
The typical structure of a plumbing business: salaries and social charges (50-60% of turnover), materials and supplies (15-20%), vehicles and equipment (8-12%), mandatory professional insurance (2-3%).
Net margins generally sit between 8% and 15% depending on operational efficiency and positioning (emergency call-outs versus planned projects). Compare the target business's ratios to sector standards.
Identify significant gaps: abnormally low salaries may mask high turnover, excessive material costs reveal poor purchasing conditions.
Points requiring vigilance specific to the sector
The plumbing sector presents particular risks that require specific attention during the takeover audit. Three areas deserve thorough examination.
Disputes and ongoing warranties
Verify the existence of customer disputes: unresolved water damage, contested defects, ongoing claims. Examine ten-year warranties that commit the business long-term.
Check professional liability insurance coverage: amounts, excesses, exclusions. A major claim can compromise the business's financial viability.
Suppliers and purchasing conditions
Identify main suppliers of sanitary ware, piping, heating and their commercial conditions: negotiated payment terms, volume discounts, access to specialised products.
Verify the transferability of these conditions after takeover. Some suppliers reassess conditions for a new owner, which can impact margins.
Seasonality and cash flow
Analyse seasonal variations: peak emergencies in winter (frozen pipes, heating breakdowns), renovation works concentrated in summer. This seasonality impacts working capital requirements.
Evaluate the capacity to cover quiet periods and manage professional customers' payment terms (typically 30-60 days).
Preparing the transition and support
Negotiate a transition period of 3 to 6 months minimum with the seller. This phase allows progressive transfer of customer and supplier relationships and specific technical knowledge (complex installations, particularities of certain sites).
Plan communication to key customers and employees. A clumsy announcement can trigger departures or contract terminations. Our guide on retaining key employees details effective communication strategies.
The Leez expert network (fiduciaries, lawyers specialising in M&A) can support you in the audit, negotiation and legal structuring of the takeover. Also discover the plumbing businesses available on our platform.
Taking over a plumbing business requires rigorous and methodical analysis. Beyond the figures, you must understand the sector's specificities: mandatory qualifications, recurring contracts, technical equipment and supplier dependence. The team in place, customer base and cost structure determine the viability of your takeover.
The transition represents a critical moment. A period of support from the seller facilitates the transfer of customer relationships, technical skills and operational practices. Take time to verify authorisations, ongoing warranties and potential disputes before committing.
Are you considering taking over a plumbing business? Discover the businesses available on Leez and find the opportunity that matches your project. Our platform gives you access to verified listings and a network of experts to support you in your approach.
