Phil RisherPhlash Consulting · No. 1 Digital Marketing Consulting Company For $1m-10m Home Service Businesses 🚀

10X THE VALUE OF YOUR BUSINESS #hvac #plumbing #electrician #lawncare #carpetcleaning

6 Mar 2024 · 1 min

Watch on YouTube

0:30

A short advice-oriented YouTube segment by Phil Risher arguing that service contracts (recurring revenue) dramatically increase a service company's valuation compared with one-time sales. He contrasts "one-and-done" installers with businesses that build a $10 million book of recurring contracts, using an example where homeowners pay about $300/year for furnace management to illustrate the higher value of predictable recurring revenue.

Questions this video answers

$10 million

$300 per year

Chapters

Service contracts will have a huge impact on the value of your company. So if you're a one and done guy to go back to my H Vac guy, if all you do is install H Vac systems and they last for 25 years and you're always chasing the next deal, that business is going to be very low valuation. Because an acquirer is going to realistically say, well, there's nothing here to buy, really. They've got to chase revenue. Whereas if you've got a 10 million book of recurring contracts where homeowners pay you 300 a year to manage their furnace, that's worth a mint. Yes, Right. Because you've got recurring revenue.