Last updated: 2026-04-13
“`html
Looking to acquire in this space?
CT Acquisitions sources proprietary, off-market deals for serious buyers. Tell us your mandate and we will bring you businesses that fit. No cost to explore.
A quality of earnings (QoE) report is a detailed financial analysis that examines the sustainability, repeatability, and true profitability of a company’s reported earnings. For a home services business generating $5M in annual revenue, a QoE report identifies which revenue streams are recurring (like service contracts), which are one-time (like equipment sales), and adjusts EBITDA for non-recurring expenses, related-party transactions, and accounting inconsistencies. This 50-100 page document reveals the actual earning power available to a buyer, critical because reported earnings often differ substantially from what a new owner can actually sustain. For a deeper look, see our guide on quality of earnings what buyers need to know. For a deeper look, see our guide on evaluating revenue quality factors buyers prioritize.
Home services businesses, HVAC, plumbing, electrical, landscaping, often report earnings that look better on paper than they perform in reality. A QoE report uncovers these gaps: For a deeper look, see our guide on sell side quality of earnings why buyers care so much.
A quality QoE report for a typical home services business typically adjusts for:
These adjustments create “normalized EBITDA”, what earnings will realistically look like under new ownership. A $1.2M reported EBITDA might normalize to $850K after adjustments, directly impacting valuation and deal price.
Buyers (PE firms, search funds, strategic acquirers) typically commission QoE reports during due diligence, not before. However, savvy sellers engage firms to prepare internal QoE analyses before marketing, which strengthens negotiating position and speeds closing.
If you’re selling your home services business, understanding QoE dynamics before entering the market prevents surprises. Buyers will scrutinize recurring revenue, owner-dependent costs, and customer retention. Preparing your financials for this analysis, documenting which revenue renews, separating discretionary expenses, and validating customer contracts, increases valuations by 10-15%. At CT Acquisitions, we help business owners understand these adjustments early, positioning you competitively with the 40+ capital partners we work with.
Directly. If your reported $1.5M EBITDA normalizes to $1.1M after QoE adjustments, valuation drops proportionally. At a 5-6x multiple typical for home services, that’s $2-3M less in sale proceeds. This is why transparency on recurring revenue, customer contracts, and owner compensation during QoE review prevents last-minute renegotiations and deal friction.
“`
Every business is different. A quick conversation can give you a real answer based on your specific numbers.
Book a Free Consultation
Try Our Valuation Tool
Want more deal flow in this sector?
We run targeted, confidential outreach to owners and bring acquirers proprietary deals that never hit the open market. Tell us what you are looking for.
About the Author
Christoph Totter is the founder of CT Acquisitions, a buy-side partner headquartered in Sheridan, Wyoming. We work directly with 100+ buyers, search funders, family offices, lower middle-market PE, and strategic consolidators, including direct mandates with the largest consolidators that other intermediaries cannot access. The buyers pay us when a deal closes, not the seller. No retainer, no exclusivity, no contract until close. Connect on LinkedIn · Get in touch
Related Guide
2026 LMM Buyer Demand Report, Aggregated buy-box data from 76 active U.S. LMM buyers.
Related Guide
Buyer Archetypes, Five buyer archetypes that buy LMM businesses.
Related Guide
Letter of Intent (LOI) Guide, The 9 essential terms before you sign.