How much does a School Bus Contractor cost to buy?

A typical School Bus Contractor sells for 2.5x to 5x seller's discretionary earnings. With estimated SDE of $308K, expect to pay roughly $770K to $1.5M before adjustments for assets, debt, growth, and local market quality.

How much does it cost to start a School Bus Contractor?

Startup costs range from $350K to $2.5M depending on location, equipment, and scale.

Service

School Bus Contractor

Q: What are the profit margins for a School Bus Contractor?

The average profit margin for a School Bus Contractor is around 14%. Largest costs are driver wages, fuel, insurance, bus leases or loans, maintenance, monitors, dispatch, and compliance. Margins are lower than light services, but contract renewal and route density can create durable cash flow.

Multi-year public contracts hiding in yellow buses

Bottom line

Worth studying, but do not buy without strong local proof.

School bus contractors operate fleets under district transportation contracts. It is unsexy, regulated, and driver-constrained — but the revenue can be unusually sticky because districts need safe daily transport, bid cycles are long, and switching vendors is operationally painful once routes, drivers, and maintenance are in place.

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Acquisition score

Fair

Avg Revenue

$2.2M

Profit Margin

14%

Acquisition Multiple

2.5x - 5x

Startup Cost

$350K - $2.5M

How It Works

The company bids on school district routes, buys or leases buses, hires CDL drivers and monitors, handles maintenance/compliance, and invoices per route, per day, or per contract. Profit depends on utilization, driver retention, fleet age, fuel management, and renewal discipline.

Revenue Range

Low End

$750K

Typical

$2.2M

High End

$8.0M

Pros

+Sticky government and school district contracts
+Route density creates scale advantages
+Buses are financeable hard assets
+Acquirers can expand into charter, shuttle, and special-needs transport

Cons

-Driver shortages can destroy service quality
-Heavy compliance, insurance, and safety exposure
-Capital intensive fleet replacement cycle

Best For

Transportation operators comfortable with regulated contracts, asset financing, and driver recruiting

Operating Costs

Largest costs are driver wages, fuel, insurance, bus leases or loans, maintenance, monitors, dispatch, and compliance. Margins are lower than light services, but contract renewal and route density can create durable cash flow.

SBA Financing Estimator

Adjust the deal — see if it cash flows after debt service

$-53742/mo

after debt service

Deal price — $7.7M

Range: $4.4M (2.5×) to $13.2M (5×+)

Down payment — 15% ($1.2M)

SBA minimum equity injection is 10% for change-of-ownership

Interest rate — 8.00%

Current prime-based SBA rates: 7.5–10.5%

Loan term — 10 years (120 mo)

Standard SBA 7(a): 10 years for business acquisition

Down payment

$1.2M

15% equity injection

Loan amount

$6.5M

85% SBA-financed

Monthly payment

$79K/mo

$3.0M total interest

Monthly profit

$26K/mo

at 14% margin

Monthly cash flow after debt service

$-53742/mo

Margin does not cover debt service at these terms. Lower the deal price, increase the down payment, or extend the loan term.

Estimates only. Excludes owner compensation, capex, working capital draws, and taxes. Margin assumes average occupancy and volume. Actual SBA terms vary by lender and borrower profile.