How we value a business
The short version
A small business sells for a multiple of what it earns its owner. Brokers call that number SDE, seller's discretionary earnings: profit before the owner's own salary, perks, interest, depreciation and one-time costs. Across the five years ending mid-2026, businesses sold on BizBuySell went for about 2.2x to 3.3x SDE depending on the trade, and roughly 0.4x to 2x annual revenue. Our ranges start from those closed-sale multiples, by trade, and get tighter as we learn more about the specific business.
Three tiers, by how much we know
1. The public-records range. For an unclaimed page we only have what the state knows: the licenses held and when they were issued, and whatever size signal the file carries. Some of those signals are strong. Texas bars and restaurants report their alcohol sales to the Comptroller every month, so we know real revenue for about 22,000 of them. Child care centers have a licensed capacity. Trucking companies file their truck and driver counts. Contractors show whether they carry workers' comp. From the signal we estimate revenue, apply the trade's typical owner margin, then the trade's multiple, and widen the range to match how sure we are. If the public file is too thin to say anything honest, the page shows no number at all.
2. The owner's numbers. Enter three things: last year's gross revenue, what you took home before your own salary and perks, and your lease term. The range narrows to about plus or minus 15% because now the earnings are real, not estimated. This is the number worth talking about.
3. A brokered opinion of value. A full recast of your tax returns, comps from closed sales in your trade and metro, and a written opinion from the agent for your state. Free with a listing agreement.
What drives the range
- The trade. A car wash sells near 4.9x SDE; a restaurant near 2.2x. Same profit, very different price.
- How long you've held the license. Older licenses mean a known customer base, and in a few trades the license itself has value: a full liquor license in a quota-full California county can be worth more than the bar's fixtures.
- Real revenue signals. Reported alcohol sales, licensed capacity, trucks and drivers, workers' comp and bond amounts.
- The metro. Where closed listings in a metro consistently trade above or below the national multiple, the range moves with them.
- Real estate. Gas stations, car washes and many clinics sell with the building. Our range is the business only unless the page says otherwise.
What we don't do
We don't scrape reviews or guess from a storefront photo. Every record traces to a public file, and the page tells you which one. We don't publish an owner's home address for a home-based business. And we don't call any of this an appraisal: it is an estimated value range based on public records and category benchmarks, built to start a conversation, not to end one.
Estimated value ranges are based on public records and published industry benchmarks. They are not appraisals and not offers.