Water & Sewer Line Repair, Light Excavation Co 

2025’s revenues were 1.42M with 607K in earnings.  That is a 42% profit margin which is almost unheard of for a service company.  The sales price is 1,590,000 which is only 2.6 times the 2025 earnings.  They also started 2026 with a 208K backlog which is about 1 ½ months of work.   The owner has run this company with steady growth and low stress by being the go-to company with the highest ratings, the best employees/equipment, the longest presence in their market, and the deepest connections for referrals/collaborations.

They do 80% residential work which is primarily sewer line replacements.  This includes after a failed inspection during a home sale; failure after repeated drain cleaning; lack of homeowner maintenance; age-related.   This means that most of their work comes from a need which is important to keep in mind compared to a lot of other companies.  The company has a great location, long-term employees, remodeled cool/functional building, and has been so respected that they only spend 1 1/4% of their revenues on marketing by having enough recurring referrals that they can choose the work that they want while turning down many jobs.

The company has 70% recurring customer base which is mostly from their real estate agents, city inspectors, and other construction companies’ referrals.  They do not pay any referral fees because of their high-quality work doesn’t embarrass the people/companies who refer them.  The company has a second source of recurring revenue from the approximately 11,000 orangeburg tar paper sewer pipes that were installed in Colorado Springs in the 1950’s and 1960’s.   These remaining 9,500+ orangeburg tar paper sewer pipes need to be replaced regardless of a house sale because they are failing and rarely pass inspection.  They have done over 400 orangeburg pipe replacements compared to the 9K plus that will eventually need to be replaced (.  Their cost of doing these jobs is less than 2K and they invoice them for 7,500 dollars which is very profitable recurring work for the new owner. Additionally, the company has found a profitable income stream with advanced trenchless epoxy sewer pipe lining.  Every year the number of liners installed increases, currently 125 installs in the last 15 months.  Affordability, lack of property destruction, no street cut fees, no utility crossings, ability to go under existing structures, and a long warranty has made this an attractive and lucrative option.

This business is in a great current location with plenty of room for growth.

The result is a system where they decide which jobs to say yes to that the company is already being asked to bid.  The new owner will not need to create, change, or invest capital or time in improving the marketing, just to say yes to more work.  They do not solicit reviews but still have dozens of letters from happy customers, a 4.9-star Google rating.  They only spend 16K per year on advertising which is only 1 ¼% of the revenue and consists of Next Door, old-fashioned Yellow Pages(Thryv), and the occasional neighborhood postcard.  There is also a physical marquis/sign on the busy street that the owners have fun with posting services and messages, garnering great local as well as social media interactions.  Traditionally, the biggest risk for a new buyer is loss of revenues post-closing which is not a risk with this company based on the company’s reputation and strong demand.

The owner states “There’s a reason that the majority of our business is referral-based, we have high standards, so we do things the right way, the first time.  Our customers are happy and refer most of our work to us.  We are a full-service, fully insured, and bonded, privately owned small business with many years of sewer and water line experience, and the highest rated in our market.  We accomplish this by offering an efficient, reliable, and quality service for both residential and commercial projects.  We are recommended by local municipalities, inspectors, realtors, and contractors. This is not about the owner(s), it is about the quality, availability, and reliability of the work.  We never embarrass the professionals who refer work to us”.  Those workers will stay with the company.  The owner(s) don’t do the work themselves.

The company provides a full range of services including trenchless excavating, when possible, to preserve gardens, trees, and landscaping along with occasional sewer inspections and cleanouts, sewer repair and replacement including street cuts, sewer liners, and occasional video sewer inspections.  They also provide grease trap installation/replacements, gas line installation/repairs, grading/regrading, underground boring, backwater valve installation, and drainage remediation.

The buyer will get 239K in current value large assets made up of two Ford E 450 box trucks, 4 mini excavators, 2 trailers, a skid steer, and an international dump truck.  In addition, there are a lot of small tools/equipment, supplies, etc. worth at least another 50K.  This is all included in the sales price.  There is also approximately 3K in inventory that the new owner will get which all totals just under 300K.

In 2003, the owners started the business to focus on high margin and fun work to become more profitable.  Plus, the new model only needed a couple of employees compared to the previous 13.  It also allowed them to only bid higher margin work that they could schedule on their terms allowing the owners to work less hours and make more money.  The company operates with a lean team of two owners who work 30 hours a week each and two employees and an independent crew that does the noninvasive pipe bursting.  The two employees are a full-time foreman at 36/hour who was hired 4/2022.  He arrives early to jobs, calls in utility locates, holds a CDL, orders materials, hauls equipment, coordinates inspections, and serves as the primary point of contact for customers in the field. He oversees all aspects of job execution from start to finish.  The 2nd employee usually works with the foreman and is also full time.  He is a skilled technician with 8 years of sewer repair experience. His responsibilities include maintaining fully stocked trucks, managing inventory, setting up traffic control and signage for street cuts, excavation support, and pipe installation.  The owners don’t do any hands-on field work. 

Location:  El Paso County CO

The sales price is 1.59M, which includes all assets debt free.  The seller will be keeping their cash and accounts receivables and will pay off all debt including the accounts payables so that the business transfers debt free.  This is an S Corp dba and will most likely be an “asset sale”.