Fred McGill on Buying an Electrical Services Business for $3.2M

The Setup Fred McGill spent seven years building an online real estate brokerage from scratch. Running that business put him shoulder-to-shoulder with tradespeople as vendors and counterparties, and his separate work as a real estate investor reinforced the same pattern. By the time he started looking at acquisition targets, the residential services trades were not a foreign category. They were a world he had already been buying from. When he chose a vertical, he skipped the two that most searchers gravitate toward. HVAC and plumbing have become the darlings of the self-funded search community, which means more buyers chasing the same deals and compressed multiples. McGill picked electrical instead, arguing it sits in the shadow of its two louder cousins while carrying similar unit economics, similar recurring demand, and a thinner buyer pool. The Deal McGill acquired Bray Electrical Services in a $3.2M transaction. The specific capital stack was not broken out publicly, which is typical for self-funded searchers in this size range where SBA 7(a) plus seller paper is the dominant pattern. What is clear is that he entered the deal with a growth plan rather than a steady-state plan. Year one is expected to run roughly 25% above the seller's baseline, meaning the underwriting case assumes active operator intervention on demand generation, pricing, or dispatch capacity, not just holding the wheel. Operating Moves Two obstacles sit in front of every trades buyer, and McGill's episode centers on both. - Licensing. Electrical work requires a licensed master electrician on the business license in almost every jurisdiction. A non-tradesperson buyer has to either retain the outgoing owner's license holder, bring in a qualified employee as the license of record, or structure an arrangement with a contracted master. Solving this on day one is non-negotiable. If the license holder walks, the business cannot legally pull permits. - Hiring skilled labor. The ceiling on an electrical business is almost always techs, not demand. McGill's 25% growth plan is effectively a hiring plan in disguise. Every incremental truck is an incremental journeyman plus a helper, and both are scarce. Operating Lessons - Pick the vertical your peers ignore. HVAC and plumbing attract a premium because searchers talk about them constantly. Electrical does the same job of recession-resistant, permit-gated, recurring residential demand with less bidding pressure. - Adjacent experience counts more than operator experience. McGill did not run a trades business before. He ran a business that sold to and worked alongside trades. That proximity is enough to get underwriters and sellers comfortable; it is not enough to skip the licensing and hiring homework. - Underwrite the license holder as a person, not a line item. In licensed trades, one human being holds the key to the entire enterprise. Build redundancy into that role before you close, or price the risk into the deal. - Growth in residential trades is a labor problem, not a marketing problem. If the plan requires 25% more revenue, the plan requires enough electricians to deliver 25% more jobs....