Want to understand current sales and earnings multiples for your business?

Good news – you found it!

See the Q1 2023 DealStats Value Index from the valuation experts at Business Valuation Resources below, it’s packed with insight across 15 industries, including:

Sales and gross profit multiples.

Earnings multiples (EBITDA / SDE / cash flows).

Impact of transaction size on multiples.

10-year trend for private-seller sector multiples (you might be surprised how consistent some industries are).

Time to close.

Median owner compensation.

Commentary on the market from other transaction experts.

Are you an owner and unsure where to start? Check out our 2023 owner guide to selling your business.

So how are the markets and economy impacting business sales?

  1. An appropriate, defensible, market-based valuation is critical (review trailing 12-month cash flow)
  2. Stable outlook / market / customer mix increases probability of success
  3. Focus on pricing and cash flow – are you sacrificing margins to maintain sales? A valuation range is driven by cash flow and profit..not top-line revenue
  4. Clarity on owner role vs team
  5. Organized financials & records are foundational to a deal getting done
  6. Interest rates are not the primary driver in small-to-medium business sales

Another important point to keep in mind – the stock market may value Amazon or Disney differently than it did a year ago, however, small to midsize businesses generally sell at a multiple of 2.0x – 5.0x trailing twelve months cash flow. This range has been remarkably consistent over decades.

Businesses are selling. The key is that the business is of quality AND priced appropriately.

If you are considering selling, now more than ever, professional representation and guidance matters.

Review the quarterly data:

This report, combined with the quarterly IBBA Market Pulse Report that we also participate in and share, provides an incredibly rich amount of data and market insight.  

Want to discuss your business, the sale process, valuations, or the market?

Reach out for a confidential, no commitment chat. You will come away with knowledge and concrete steps to immediately improve the value of your business (whenever you choose to explore the sale process).

Hopefully we have shed light on the current market and valuation multiples for you.

That is it for today – more to come in a future post. Please forward or share this content if you find it valuable. As always, thank you for reading! 

At Washington Business Brokers we are experts in valuation, optimizing a business for sale, buyer identification and qualification, negotiation, deal structuring, and closing.

If you would like to better understand the value of your business or learn more about the process of confidentially selling:

call or text 206.703.3555
email [email protected]
or schedule time for an exploratory, free chat

Conversations are always confidential and there is no commitment. We will be ready when you are!

Leave a Reply

Subscribe To Our Newsletter

Receive monthly update with market insights and actionable tips for business owners / buyers

More To Explore