A shared language for the deal

Plumbing company M&A glossary

177 terms to help you read a report, compare an offer and ask better questions. These are concise working summaries. Contracts, calculation policies and applicable law can use different definitions; the linked guides explain scope and verification.

A

Accounts payable: Amounts recorded as owed to suppliers and other vendors. Identify overdue balances and items outside ordinary operations. Read the related guide for Accounts payable ↗
Accounts receivable: Amounts recorded as owed by customers for billed or recognized sales. Aging and collectability affect their usefulness in a deal. Read the related guide for Accounts receivable ↗
Accrual accounting method: A method generally recognizing tax income when earned and expenses when incurred under applicable tests. Cash receipt timing alone does not establish the reporting period. Read the related guide for Accrual accounting method ↗
Add-backs: Proposed adjustments that increase an earnings measure by reversing identified expenses. Acceptance depends on evidence, recurrence, replacement costs and the buyer's or lender's analysis. Read the full definition for Add-backs ↗
Add-on acquisition: A business acquired to join an existing operating platform. Integration plans may address service territory, people, systems and shared functions. Read the full definition for Add-on acquisition ↗
Adjusted EBITDA: EBITDA modified for specifically identified adjustments. It is a non-GAAP measure whose usefulness depends on a transparent reconciliation and support for each adjustment. Read the full definition for Adjusted EBITDA ↗
Adjusted tax basis: An asset's tax basis after required increases or decreases, such as capital improvements or depreciation adjustments. It is distinct from its current market value. Read the related guide for Adjusted tax basis ↗
Asset purchase agreement (APA): The definitive contract specifying purchased assets, assumed obligations, consideration and closing terms for an asset transaction. The agreement does not independently transfer a regulated credential. Read the full definition for Asset purchase agreement (APA) ↗
Asset sale: A transaction in which specified business assets are sold and selected obligations may be assumed. Tax treatment and regulated operating authority require separate review. Read the related guide for Asset sale ↗
Assignment consent: Approval requested or required under a contract before transferring specified rights or duties. The need for consent comes from the contract and applicable law. Read the related guide for Assignment consent ↗
Authority having jurisdiction (AHJ): The public body or official responsible for the relevant approval, code enforcement or inspection. Its jurisdiction can differ by project and work type. Read the related guide for Authority having jurisdiction (AHJ) ↗
Average ticket: Revenue from a defined set of completed jobs divided by the number of those jobs. Specify treatment of refunds, taxes, memberships and installation projects. Read the full definition for Average ticket ↗

B

Backflow: Unwanted reverse movement through a water connection that can introduce nonpotable material into drinking-water piping. Prevention depends on the relevant system and program. Read the related guide for Backflow ↗
Backflow prevention: Measures intended to interrupt or prevent contamination through reverse water flow. Device selection, testing and local approval need separate review. Read the related guide for Backflow prevention ↗
Backlog: Accepted or contracted work that remains to be completed. Backlog quality depends on cancellation rights, timing, margins and execution capacity. Read the related guide for Backlog ↗
Balance sheet: A statement of assets, liabilities and equity at a specified date. Read the related guide for Balance sheet ↗
Behavioral control: The federal employment-tax factor addressing a business's right to direct how a worker performs the work. It forms part of a broader relationship analysis. Read the related guide for Behavioral control ↗
Blind teaser: A short opportunity summary designed to withhold identifying details before an approved disclosure stage. Confidentiality also depends on the specificity of the remaining information. Read the related guide for Blind teaser ↗
Bona fide representative: New Jersey's designated licensed-master relationship to a plumbing business, including a specified ownership requirement. The Board must confirm eligibility for the actual structure. Read the related guide for Bona fide representative ↗
Book value: The amount carried in the accounting records for an asset or equity balance. It does not establish current sale value. Read the related guide for Book value ↗
Builder concentration: The share of revenue, receivables or backlog attributable to one builder or a defined group of builders. State which measure and period the concentration calculation uses. Read the full definition for Builder concentration ↗
Business entity license: Operating authority issued to a business rather than solely to an individual worker. New Hampshire mechanical rules illustrate why both entity and individual records matter. Read the related guide for Business entity license ↗

C

Call-booking rate: Booked jobs divided by eligible incoming calls for the same period. The denominator should distinguish service inquiries from spam, existing-job calls and calls outside the service area. Read the full definition for Call-booking rate ↗
Callback and warranty rate: Return visits or warranty events divided by a defined job population over a stated period. Distinguish workmanship issues from new work and manufacturer failures. Read the full definition for Callback and warranty rate ↗
Capital expenditure (capex): Spending to acquire or improve assets providing benefits beyond routine current operations. Book and tax classification require their respective policies. Read the related guide for Capital expenditure (capex) ↗
Capital gain: Gain from disposing of a capital asset for more than its adjusted basis, subject to applicable rules. A business asset sale can also generate other tax characters. Read the related guide for Capital gain ↗
Cash accounting method: A method generally recognizing tax income when actually or constructively received and expenses when paid, subject to exceptions. It can obscure operational period comparisons. Read the related guide for Cash accounting method ↗
Cash at close: Consideration payable to the seller at closing after the agreed offsets and disbursements. It excludes amounts that are contingent, financed or retained as equity. Read the related guide for Cash at close ↗
Cash-flow statement: A statement explaining cash movements through operating, investing and financing activities during a period. Read the related guide for Cash-flow statement ↗
Change order: A documented modification to a project's agreed scope, price or timing. Required authorization and form depend on the contract and applicable rules. Read the related guide for Change order ↗
Change-of-control clause: A provision addressing specified changes in ownership or control. Its trigger can differ from a direct assignment of the underlying contract. Read the related guide for Change-of-control clause ↗
Closing condition: A specified event or requirement that must be satisfied or validly waived for a party's closing obligation. Its exact effect depends on the agreement. Read the related guide for Closing condition ↗
Closing funds flow: A reconciliation showing the sources of closing funds and each recipient's disbursement. It should tie consideration, debt payments, fees and withheld amounts to approved documents. Read the related guide for Closing funds flow ↗
Commercial service plumbing: Plumbing repair and maintenance for business, institutional or other commercial properties. Contract terms and customer payment patterns vary. Read the related guide for Commercial service plumbing ↗
Competent person: For OSHA construction excavation rules, a person able to identify relevant hazards and authorized to take prompt corrective action. A title alone does not establish this capability. Read the related guide for Competent person ↗
Confidential information memorandum (CIM): A seller-facing transaction document presenting the business, operating model, financial information and opportunity for qualified prospective buyers. It is a disclosure tool rather than independent verification. Read the related guide for Confidential information memorandum (CIM) ↗
Confined space: Under OSHA construction rules, a space large enough for bodily entry, with restricted entry or exit, and not designed for continuous occupancy. Not every crawl space qualifies. Read the related guide for Confined space ↗
Confirmatory diligence: The detailed verification stage following preliminary information or agreed deal terms. The information and conditions still subject to confirmation should be explicit. Read the related guide for Confirmatory diligence ↗
Construction contractor registration: An agency registration identifying a construction business under a particular jurisdiction's rules. Nebraska registration is separate from municipal plumbing qualifications. Read the related guide for Construction contractor registration ↗
Contractor license: A business or individual credential authorizing covered contracting within specified conditions. North Dakota requires separate contractor licensing for projects within its statutory scope. Read the related guide for Contractor license ↗
Contractor license bond: A surety arrangement required under a specified contractor licensing regime. Purpose, amount, parties and continuing validity depend on that regime and the bond terms. Read the related guide for Contractor license bond ↗
Cost of goods sold (COGS): Costs assigned to the goods or services generating reported revenue. Confirm the company's direct-cost policy. Read the related guide for Cost of goods sold (COGS) ↗
Cost per booked job: Attributed marketing cost divided by booked jobs under a specified source and period. Include attribution assumptions and cancellations consistently. Read the related guide for Cost per booked job ↗
Cross-connection: An actual or potential link between potable water and a nonpotable source that can permit contamination through backflow. Read the related guide for Cross-connection ↗
Cured-in-place pipe (CIPP): A rehabilitation method forming a cured liner inside an existing pipe. It is a technical service category, not a guarantee of suitability or permanent repair. Read the related guide for Cured-in-place pipe (CIPP) ↗
Customer cohort: A group of customers sharing a defined starting event or period, used to compare later behavior. Cohort rules should remain stable. Read the related guide for Customer cohort ↗
Customer concentration: The share of a defined revenue or balance measure attributable to individual customers or a customer group. State the period and aggregation rules. Read the related guide for Customer concentration ↗
Customer deposit: Payment received before the associated work or obligation is fully delivered. Application and refund rights depend on the transaction and customer terms. Read the related guide for Customer deposit ↗
Customer retention: The share of a defined starting customer group remaining active at a later point under stated activity rules. New customers should not hide losses from that group. Read the related guide for Customer retention ↗

D

Data room: A controlled repository for transaction documents and diligence responses. Access permissions and document completeness affect its usefulness. Read the related guide for Data room ↗
Days sales outstanding (DSO): A receivables collection metric calculated from defined receivables and credit sales over a stated period. Seasonality and the chosen averaging method can distort comparisons. Read the related guide for Days sales outstanding (DSO) ↗
Debt service: Scheduled principal and interest payments for specified borrowings during a period. Include the obligations required by the relevant underwriting calculation. Read the related guide for Debt service ↗
Debt-free cash-free pricing: A pricing convention that defines value before specified debt and cash adjustments. The agreement determines which balances are debt, cash or operating working capital. Read the related guide for Debt-free cash-free pricing ↗
Debt-like item: A balance the parties agree to treat as a financing or seller obligation in the price bridge. It is a negotiated category, not every accounting liability. Read the related guide for Debt-like item ↗
Debt-service coverage (DSC): Cash flow available for defined debt obligations divided by those obligations for the same period. Policy and lender adjustments determine the actual inputs. Read the related guide for Debt-service coverage (DSC) ↗
Demand service: Work initiated by a customer's current repair or service need rather than scheduled under a recurring plan. It can still involve repeat customers. Read the related guide for Demand service ↗
Depreciation recapture: Treatment that recharacterizes specified gain associated with prior depreciation as ordinary income under applicable rules. Installment payments do not automatically defer recapture. Read the related guide for Depreciation recapture ↗
Disclosure schedules: Schedules identifying information or exceptions tied to representations and other agreement provisions. They must be read with the relevant contract language. Read the related guide for Disclosure schedules ↗
Dispatch: The process of matching incoming or scheduled jobs to available technicians, locations and capabilities. Good records show assignments and subsequent outcomes. Read the related guide for Dispatch ↗
Due diligence: An investigation of the business and transaction before committing or closing. The scope should address the actual operating model and risks. Read the related guide for Due diligence ↗

E

Earnout: Contingent purchase consideration calculated from agreed post-closing results or milestones. The metric, accounting rules, operating control and dispute process come from the deal documents. Read the full definition for Earnout ↗
EBITDA: Net income before interest, income taxes, depreciation and amortization. EBITDA excludes important cash demands and is not a GAAP measure. Read the related guide for EBITDA ↗
Enterprise value: The value attributed to the business before an agreed bridge for debt, cash and other equity adjustments. Define the convention used in an offer. Read the related guide for Enterprise value ↗
Equity injection: An eligible equity contribution toward the lender-defined project cost. Required amounts and acceptable sources depend on the transaction classification and current policy. Read the related guide for Equity injection ↗
Equity value: The value attributable to ownership interests after the transaction's defined enterprise-to-equity adjustments. It may still differ from cash proceeds after fees and tax. Read the related guide for Equity value ↗
Excavation: A human-made cut or depression formed by removing earth under OSHA's construction definition. Excavations include trenches. Read the related guide for Excavation ↗
Exclusivity: A negotiated restriction on specified sale discussions or competing transactions during an agreed period. Scope, milestones and termination rights affect its practical cost. Read the related guide for Exclusivity ↗

F

Fair market value: An estimated exchange price between informed, willing parties without compulsion. The valuation date and applicable definition should be stated. Read the related guide for Fair market value ↗
Family office: An organization managing investments and related affairs for a family or families. Its acquisition strategy and decision process are specific to that organization. Read the related guide for Family office ↗
Field service management (FSM): Processes and software supporting field work from scheduling through job documentation, invoicing and reporting. A software subscription does not establish reliable data. Read the related guide for Field service management (FSM) ↗
Financial buyer: An acquirer focused principally on investment returns and an eventual liquidity outcome. The label does not predict staffing, brand retention or deal terms. Read the related guide for Financial buyer ↗
Financial control: The federal employment-tax factor addressing control over economic aspects of the working arrangement. It does not independently determine every labor-law classification. Read the related guide for Financial control ↗
Financial diligence: Review of financial records, earnings adjustments, balance-sheet exposures and cash generation. It is broader than accepting a seller's reported profit figure. Read the related guide for Financial diligence ↗
First-time fix rate: Jobs resolved on the first qualifying visit divided by the defined eligible job population. Separate planned multi-visit installations from avoidable return visits. Read the related guide for First-time fix rate ↗
Flat-rate pricing: A quoted price for a defined task or package rather than a final charge calculated solely from hours worked. The scope and authorized changes still need clear documentation. Read the full definition for Flat-rate pricing ↗
Fleet valuation and deferred capex: Assessment of vehicle and equipment value together with delayed spending needed to maintain usable operating capacity. Market value, book value and near-term replacement needs are separate questions. Read the full definition for Fleet valuation and deferred capex ↗
Form 8594: The IRS asset-acquisition statement used by parties to covered business asset transactions. Applicability, allocation classes and later consideration changes require transaction-specific review. Read the related guide for Form 8594 ↗
Full standby seller debt: Seller debt subject to an agreed prohibition on principal and interest payments for the required period. SBA equity treatment also depends on applicable policy conditions. Read the related guide for Full standby seller debt ↗

G

Going-concern value: Value associated with the ability of an existing business to continue functioning after ownership changes. Federal acquisition-allocation rules distinguish this concept from tangible assets. Read the related guide for Going-concern value ↗
Goodwill: Business value associated with expected continued customer patronage and similar intangible benefits. Its tax allocation is separate from equipment, other intangibles and going-concern value. Read the related guide for Goodwill ↗
Gross margin by line: Revenue less the consistently assigned direct costs for a service line, expressed as dollars or a percentage of that line's revenue. Labor burden and material treatment affect comparability. Read the full definition for Gross margin by line ↗
Gross profit: Revenue less cost of sales for the same period. It is distinct from profit after operating expenses. Read the related guide for Gross profit ↗
Growth capex: Asset spending intended to expand capacity or capabilities beyond the current operating base. The expected return is an assumption until evidenced. Read the related guide for Growth capex ↗

H

Headline price: The prominently quoted deal value, which may combine immediate cash with deferred, contingent or noncash components. It is not necessarily the seller's spendable proceeds. Read the related guide for Headline price ↗
Holdback: Consideration temporarily retained by the buyer for an agreed purpose rather than paid immediately. An escrow involves a separate holder; a holdback's custody and release terms vary. Read the related guide for Holdback ↗
Home-warranty work: Service performed through a home-warranty administrator's coverage and dispatch arrangement. Authorization, payment limits and customer obligations depend on the relevant agreements. Read the full definition for Home-warranty work ↗
Hydro-jetting: Cleaning sewer or drain lines using directed pressurized water. This definition supplies no pressure setting, operating procedure or safety clearance. Read the related guide for Hydro-jetting ↗

I

Income statement: A report of revenue, expenses and earnings over a specified period, also called a profit-and-loss statement. Read the related guide for Income statement ↗
Indemnification: A contractual allocation of specified losses or claims between deal parties. Covered matters, procedures, exceptions and recovery limits come from the agreement. Read the related guide for Indemnification ↗
Indemnity basket: A negotiated loss threshold affecting when specified indemnity claims become payable. A deductible and a tipping basket produce different outcomes. Read the related guide for Indemnity basket ↗
Indemnity cap: A contractual ceiling on recovery for a defined category of claims. Exceptions and overlapping recovery sources need to be read separately. Read the related guide for Indemnity cap ↗
Indemnity escrow: Consideration placed with an escrow holder to support specified indemnification claims. Release dates, claim procedures and recovery limits are negotiated terms. Read the full definition for Indemnity escrow ↗
Independent sponsor: A deal sponsor that generally assembles investment capital for a specific acquisition rather than drawing solely from a precommitted fund. Funding certainty depends on actual commitments. Read the related guide for Independent sponsor ↗
Installment sale: A sale with at least one payment received after the tax year of sale, potentially eligible for installment reporting. Inventory, recapture and other exceptions require separate treatment. Read the related guide for Installment sale ↗
Inventory obsolescence: Loss of inventory usefulness or recoverable value because items are outdated, damaged or unlikely to be used. A count alone does not establish salable value. Read the related guide for Inventory obsolescence ↗

J

Job contribution margin: Job revenue less the variable costs identified by the company's calculation policy. It does not automatically include every overhead cost. Read the related guide for Job contribution margin ↗
Job costing: Assigning revenue and relevant costs to individual jobs under a consistent policy. It reveals results that aggregate company margins can conceal. Read the related guide for Job costing ↗
Journeyman plumber: An individual trade credential distinct from apprentice and master status. Authorized work, supervision and reciprocity depend on the jurisdiction. Read the related guide for Journeyman plumber ↗

L

Labor burden: Employment costs beyond stated wages included in a defined labor-cost calculation, such as payroll taxes, benefits or coverage. State the included components. Read the related guide for Labor burden ↗
Lead conversion: The share of defined inquiries reaching a chosen outcome, such as a booking or completed sale. Specify the outcome rather than comparing unlike funnels. Read the related guide for Lead conversion ↗
Lead-source concentration: The share of identified inquiries, booked jobs or revenue coming from one marketing source. Attribution rules and the chosen denominator matter. Read the full definition for Lead-source concentration ↗
Letter of intent (LOI): A preliminary document outlining proposed transaction economics and process terms. Binding provisions, if any, must be identified from the document and applicable law. Read the full definition for Letter of intent (LOI) ↗
License classification: The regulator's category describing the trade or scope a license covers. New Mexico's separate mechanical classes illustrate why plumbing and gas scopes should not be conflated. Read the related guide for License classification ↗
License endorsement: A licensing route evaluating an existing credential and qualifications against the receiving jurisdiction's criteria. An application and any additional requirements still apply. Read the related guide for License endorsement ↗
License reciprocity: A recognized pathway based on another jurisdiction's credential under stated conditions or agreements. It does not mean every license level or business authority transfers automatically. Read the related guide for License reciprocity ↗
License transfer on ownership change: The regulator's process, if available, for continuing or reissuing authority after a transaction. An asset purchase, equity sale and legal-entity conversion can follow different rules. Read the full definition for License transfer on ownership change ↗
Loan amortization schedule: A schedule allocating each planned payment between interest and principal and showing the remaining loan balance. The rate, timing and loan terms control the result. Read the related guide for Loan amortization schedule ↗

M

Maintenance capex: Estimated asset spending needed to sustain existing operating capacity. It should be distinguished from spending intended to expand the business. Read the related guide for Maintenance capex ↗
Management buyout: An acquisition in which existing managers purchase the business or a controlling interest. Funding and continuing ownership arrangements vary. Read the related guide for Management buyout ↗
Master plumber license and qualifying party: A master credential identifies an individual's licensed trade authority; a qualifying-party role connects a qualified person to a business's operating authority. Titles, required relationships and responsibilities vary by jurisdiction. Read the full definition for Master plumber license and qualifying party ↗
Membership churn: Memberships lost during a defined period relative to the specified member population. Distinguish cancellation, nonrenewal and administrative termination. Read the related guide for Membership churn ↗
Membership service obligation: Benefits the business still owes under paid or active membership terms. Cash already collected does not remove the cost of providing those benefits. Read the related guide for Membership service obligation ↗
Membership-interest sale: A transaction involving ownership interests in an LLC. The tax classification, operating agreement and regulator's rules affect the transaction's consequences. Read the related guide for Membership-interest sale ↗
Multi-trade platform: An operating group that combines plumbing with other trades, such as HVAC or electrical services. Each trade still has its own personnel, operating economics and relevant licensing scope. Read the full definition for Multi-trade platform ↗

N

Net income: The reported earnings remaining after the statement's expenses and other included items. It is not synonymous with cash generated. Read the related guide for Net income ↗
New-construction plumbing: Plumbing work associated with building new structures. The project model creates different scheduling, billing and concentration questions from demand service. Read the related guide for New-construction plumbing ↗
Non-compete and owner employment agreement: Deal provisions addressing the seller's post-closing competitive activities and employment responsibilities. Their scope and enforceability require document-specific and jurisdiction-specific review. Read the full definition for Non-compete and owner employment agreement ↗
Non-disclosure agreement (NDA): An agreement governing use and disclosure of specified confidential information. Permitted recipients, exclusions, duration and remedies depend on its terms. Read the related guide for Non-disclosure agreement (NDA) ↗

O

Operating working capital: Specified current operating assets less specified current operating liabilities. Deal definitions commonly differ from a textbook current-assets-minus-current-liabilities calculation. Read the related guide for Operating working capital ↗
Operational diligence: Review of how the company delivers work, uses people and equipment, serves customers and records results. It tests whether performance can continue after ownership changes. Read the related guide for Operational diligence ↗
Owner dependence: Reliance on the seller to perform essential selling, technical, licensing or management work. Assess which responsibilities transfer and which need replacement capacity. Read the full definition for Owner dependence ↗

P

Permit-required confined space: A confined space with specified serious hazards, such as hazardous atmosphere, engulfment or trapping conditions. An employer's entry program and controls require separate review. Read the related guide for Permit-required confined space ↗
Pipe bursting: A trenchless replacement method that breaks or displaces an existing buried pipe while installing a replacement along its route. Suitability requires project-specific evaluation. Read the related guide for Pipe bursting ↗
Platform acquisition: An acquisition intended to establish or expand the operating base for a series of related purchases. Platform status describes the buyer's strategy, not a guaranteed valuation premium. Read the full definition for Platform acquisition ↗
Plumbing apprentice: A trainee following an authorized supervised plumbing learning pathway. Registration and creditable experience rules must be checked in the relevant jurisdiction. Read the related guide for Plumbing apprentice ↗
Plumbing inspection: The authority's review of covered work at required stages. South Dakota's rough-in and final process illustrates the risk of concealing work before inspection. Read the related guide for Plumbing inspection ↗
Plumbing permit: Project-specific authorization for covered plumbing work under the local process. NYC's permit requirements illustrate why a trade license and a project permit are separate. Read the related guide for Plumbing permit ↗
Pricebook: A maintained catalog of service tasks, scope descriptions and prices used when preparing quotes. Update controls and permissions affect consistency. Read the related guide for Pricebook ↗
Purchase-price adjustment: A contractual increase or decrease to consideration for defined closing balances or other agreed items. The measurement policies and dispute timetable determine its operation. Read the related guide for Purchase-price adjustment ↗
Purchase-price allocation: Assignment of transaction consideration among acquired asset categories under the applicable tax rules. It affects the seller's gain characterization and the buyer's asset basis. Read the related guide for Purchase-price allocation ↗

Q

Quality of earnings (QoE): An investigation of earnings support, adjustments, revenue quality and related financial risks. Scope, independence and reliance rights depend on the engagement and any applicable lender policy. Read the full definition for Quality of earnings (QoE) ↗

R

Receivables aging: A schedule grouping unpaid customer balances by time outstanding under a stated aging policy. It helps identify collection patterns and disputed amounts. Read the related guide for Receivables aging ↗
Renewal rate: Renewed agreements divided by agreements eligible to renew in the same period. Exclude plans that have not yet reached their renewal decision. Read the related guide for Renewal rate ↗
Repiping: Replacement of existing plumbing pipe within a building or defined system. The specific material, scope, permit and inspection requirements depend on the project. Read the related guide for Repiping ↗
Representations and warranties: Statements in transaction documents about the business, parties or assets. Their qualifications and the remedies for an inaccurate statement are negotiated. Read the related guide for Representations and warranties ↗
Residential service plumbing: Repair, maintenance and replacement work for residential customers. Separate service revenue from construction or large installation projects when reviewing performance. Read the related guide for Residential service plumbing ↗
Responsible managing individual (RMI): Oregon CCB's designated individual meeting the prescribed relationship and authority requirements for a contractor license. It is distinct from an individual plumber credential. Read the related guide for Responsible managing individual (RMI) ↗
Responsible Master Plumber (RMP): Texas's designated master-plumber role responsible for a company's plumbing work under Board requirements. It is a state-specific designation rather than a nationwide title. Read the related guide for Responsible Master Plumber (RMP) ↗
Retainage: A contractually withheld portion of payment pending specified completion or acceptance conditions. Collection timing and legal rights depend on the contract and jurisdiction. Read the related guide for Retainage ↗
Revenue: Amounts earned from business activity during the stated reporting period. Earned revenue and collected cash can differ. Read the related guide for Revenue ↗
Revenue per technician: Revenue for a defined period divided by a consistently defined technician count, such as average full-time equivalents. Identify included revenue and field roles before comparing shops. Read the full definition for Revenue per technician ↗
Rollover equity: An ownership interest the seller retains or receives in the buyer's post-transaction structure instead of receiving all consideration in cash. Rights, dilution and future liquidity depend on the governing documents. Read the full definition for Rollover equity ↗
Route density: The concentration of customer demand or scheduled jobs within a defined territory. Its operating benefit must be tested against actual travel and scheduling data. Read the related guide for Route density ↗

S

Safety data sheet (SDS): The hazard-communication document supplying specified information about a hazardous chemical. It supports the applicable program rather than replacing training or task-specific controls. Read the related guide for Safety data sheet (SDS) ↗
SBA 7(a) loan: A participating-lender loan supported by an SBA guaranty for eligible business purposes, including qualifying ownership changes. A program listing is not approval. Read the related guide for SBA 7(a) loan ↗
SBA guaranty: SBA's agreed protection of a lender for a portion of an eligible loan under program terms. It does not eliminate the borrower's repayment obligation. Read the related guide for SBA guaranty ↗
Search fund: A structure through which an entrepreneur raises resources to search for and acquire a business. Investor commitments and the acquisition funding model differ across structures. Read the related guide for Search fund ↗
Seasonal working capital: Changes in operating funding needs tied to predictable seasonal sales, collections or purchasing patterns. A single closing-date balance may miss those needs. Read the related guide for Seasonal working capital ↗
Section 179 election: An election to expense eligible property cost under the applicable federal limits and conditions. A purchased truck or equipment item is not automatically fully deductible. Read the related guide for Section 179 election ↗
Section 197 intangible: An acquired intangible within the federal tax category addressed by section 197. Included assets and amortization treatment depend on the statutory conditions and exceptions. Read the related guide for Section 197 intangible ↗
Seller financing: A portion of acquisition funding provided through an obligation owed to the seller. Repayment terms, security and lender restrictions depend on the financing documents. Read the related guide for Seller financing ↗
Seller's discretionary earnings (SDE): An owner-operator earnings measure that adds one working owner's compensation and supported adjustments to earnings before interest, income taxes, depreciation and amortization. Document the calculation and replacement labor needs. Read the full definition for Seller's discretionary earnings (SDE) ↗
Service agreement and membership revenue: Revenue associated with an agreement providing specified service benefits over a stated period. Billing frequency, renewal rights and unperformed customer obligations determine what the revenue represents. Read the full definition for Service agreement and membership revenue ↗
Service territory: The geographic area in which the business offers or performs work. Marketing reach, actual demand and licensed authority may cover different areas. Read the related guide for Service territory ↗
Sewer camera inspection: Use of a camera system to observe and record accessible internal pipe conditions. A recording is evidence to interpret, not proof that every hidden defect was found. Read the related guide for Sewer camera inspection ↗
Shoring: A support system intended to hold excavation sides and prevent cave-ins. The required design depends on the applicable standard and actual conditions. Read the related guide for Shoring ↗
Sliplining: Installing a smaller pipe or liner inside an existing pipe for rehabilitation. Reduced internal dimensions and project conditions must be evaluated. Read the related guide for Sliplining ↗
Stock sale: A purchase of corporate ownership shares rather than a direct purchase of listed operating assets. Entity continuity does not by itself resolve change-of-control consents or licensing duties. Read the related guide for Stock sale ↗
Strategic buyer: An acquirer whose existing operations may benefit from the target's customers, people, territory or capabilities. Expected synergies are assumptions until demonstrated. Read the related guide for Strategic buyer ↗
Survival period: The agreed time during which a representation or claim category remains available under specified terms. Different matters can have different periods. Read the related guide for Survival period ↗

T

Tax amortization: Recovery of specified costs through deductions over the applicable tax period. Eligibility and timing depend on the type of cost and governing rules. Read the related guide for Tax amortization ↗
Tax basis: The amount invested in an asset for federal tax purposes under applicable basis rules. It helps determine gain, loss and allowable cost recovery. Read the related guide for Tax basis ↗
Tax depreciation: Deductible recovery of qualifying property cost under applicable federal depreciation rules. It is not a direct measurement of the asset's market-value decline. Read the related guide for Tax depreciation ↗
Technician retention: The share of a starting technician group still employed at the period's end. Define the roles, period and treatment of transfers or leaves. Read the related guide for Technician retention ↗
Technician utilization: Defined productive or billable technician time divided by defined available time. Travel, training, standby and overtime treatment should be stated. Read the related guide for Technician utilization ↗
Time-and-materials pricing: Charges based on agreed rates for measured labor and materials. Scope, authorization and billing terms should be documented. Read the related guide for Time-and-materials pricing ↗
Trailing twelve months (TTM): The most recent consecutive twelve-month period used for a financial measurement. Record its end date instead of treating it as the last fiscal year. Read the related guide for Trailing twelve months (TTM) ↗
Transition services agreement: An agreement for defined post-closing assistance, such as bookkeeping, dispatch or handover support. Tasks, fees, duration and authority should be specified. Read the related guide for Transition services agreement ↗
Trench: A narrow below-ground excavation within OSHA's specified dimensional definition. Safety duties cannot be determined solely from a casual label or depth estimate. Read the related guide for Trench ↗
Trench shield: A structure intended to protect people within it from cave-in forces. Shielding and supporting excavation sides are distinct functions. Read the related guide for Trench shield ↗
Trenchless sewer repair: Methods for rehabilitating or replacing buried sewer pipe while reducing extensive open-trench excavation. Suitable methods depend on pipe condition, access, engineering and permits. Read the full definition for Trenchless sewer repair ↗

V

Valuation multiple: Value divided by a specified earnings, revenue or other measure. The transaction perimeter, measurement period and denominator must match. Read the related guide for Valuation multiple ↗

W

Warranty obligation: A promise to address specified defects or failures for an agreed duration and scope. Manufacturer, installer and statutory obligations need separate review. Read the related guide for Warranty obligation ↗
Work in process (WIP): Unfinished jobs and their related revenue, cost and billing information at a reporting date. Reconcile the schedule to the accounting method in use. Read the related guide for Work in process (WIP) ↗
Worker misclassification risk: Exposure arising when a worker is treated as independent despite being an employee under an applicable test. Federal employment-tax factors and state labor or coverage tests can differ. Read the full definition for Worker misclassification risk ↗
Workers' compensation coverage: Insurance or another authorized arrangement providing benefits for covered work-related injuries. Employer coverage duties, exemptions and worker status depend on jurisdiction and facts. Read the related guide for Workers' compensation coverage ↗
Working capital peg: The agreed target for the deal's defined operating working capital at closing. A shortfall or surplus affects consideration under the negotiated adjustment formula. Read the full definition for Working capital peg ↗