What’s Your Business Worth

Lifestyle Businesses

5673 businesses were sold in this category in 2015. Of those transactions, the average multiple was 2.82X, with an average sale price of $422,854.50. The median (middle) sale price was $224,000 and the mode (most common) sale price was $140,000. Across the entire category, there were $124,231,407 in sales in 2015.

This category also has some of the most variation among its businesses. Gyms and dry cleaners had the highest multiple of all the businesses in this category (5.4X and 5.29X respectively), and pet stores and jewelry stores had the lowest, with 1.089X and 1.91X respectively.

The lifestyle category has also had the highest average multiple across every category for the last 5 years, with a total average multiple of 4.38. It’s likely that this is because these businesses are going to be in constant use, no matter what trends come through or what happens in the economy — people will always buy shoes, get married, take their kids out for a day of fun — they’re predictable businesses that are reasonably straightforward to run and get a good return on.

Here are the data sets for each of the businesses in the lifestyle category from 2015:

Hospitality, Food & Beverage Businesses

10,372 businesses were sold in this category in 2015. Of those transactions, the average multiple was 2.68X, with an average sale price of $250,197. The median (middle) sale price was $155,000 and the mode (most common) sale price was $98,600. Across the entire category, there were $205,990,517 in sales in 2015.

This category had relatively little variation among the average multiples between each type of business. Bars and pubs had the highest multiples, at an average of 5.63X, with hotels, motels and bed & breakfasts coming in second at 3.42, which made them outliers in this category, as the remaining business types had a range of multiples between 1.8 and 2.9.

The hospitality, food and beverage industry has a total average multiple of 3X for the past 5 years. These businesses are typically quite demanding, requiring a lot of capital to get off the ground, with high running costs and requiring a lot of labor and attention. They can also see a downturn if the economy takes a hit, as people will often cut down on eating out, taking trips and so on.

Here are the data sets for each of the businesses in the hospitality, food and beverage category from 2015:

Logistics

1236 businesses were sold in this category in 2015. Of those transactions, the average multiple was 2.56X, with an average sale price of $571,917. The median (middle) sale price was $309,285 and the mode (most common) sale price was $292,850. Across the entire category, there were $803,103,593 in sales in 2015.

This category had relatively little variation among the average multiples between each type of business. Self-storage facilities led the charge at 3.28X, but all the remaining businesses maintained a healthy range of between 2.1 and 2.9X.

The logistics category has an average multiple of 2.84X over the past 5 years. These businesses might not be glamorous but they are reliable, bringing in consistent returns regardless of what’s happening in the market. These are typically high-complexity businesses that have a lot of running costs and are typically investments for the experienced buyer.

Here are the data sets for each of the businesses in the logistics category from 2015:

Medical

464 businesses were sold in this category in 2015. Of those transactions, the average multiple was 2.3X, with an average sale price of $658,693. The median (middle) sale price was $330,200 and the mode (most common) sale price was $160,000. Across the entire category, there were $316,044,265 in sales in 2015.

This category had relatively little variation among the average multiples between each type of business. All the businesses had multiples between 2.08X and 2.84X, but had some of the highest average sale prices throughout all the categories we analyzed, with all businesses except medical transport averaging sales prices over $500,000.

The medical category has seen a respectable average multiple over the past 5 years of 2.85X. This is another very reliable category — people always need medical care. While some might argue that it’s an industry ripe for disruption, at this point it’s very steady. Running costs do tend to be higher than some other businesses, due to the high costs of expert staffing and equipment.

Here are the data sets for each of the businesses in the medical category from 2015:

Goods

2200 businesses were sold in this category in 2015. Of those transactions, the average multiple was 2.22X, with an average sale price of $400,580. The median (middle) sale price was $250,660 and the mode (most common) sale price was $181,330. Across the entire category, there were $791,489,659 in sales in 2015.

Compared to many of the other categories in this article, the goods category has a bit more variation among the average multiples of each business type. The multiples range from 1.55X to 2.88X. The cellular/wireless communications stores were the outlier in this category, with an average sale price of $905,499.

The goods category has had an average multiple of 2.68X over the last 5 years. There is more variation between businesses in this category than others, so it’s important to take note of the specific of your industry. Some of the goods are essential (clothing), others less so (party supplies), which should factor into any buying or selling decision. Market trends are also more likely to affect businesses in this category.

Here are the data sets for each of the businesses in the goods category from 2015:

Manufacturing

1387 businesses were sold in this category in 2015. Of those transactions, the average multiple was 3.13X, with an average sale price of $1,270,423. The median (middle) sale price was $512,500 and the mode (most common) sale price was $550,000. Across the entire category, there were $1,821,796,386 in sales in 2015. This is one of only three categories where the total transaction value surpassed the billion-dollar mark (the others being trades and automotive, covered later in this post).

This category has very healthy multiples across the board, ranging from 2.33X to 4.26X. Chemical manufacturers led this category, with both the highest multiple and highest average sale price, as well as having the highest median average across all businesses analyzed. Machine shops were also very high value, with the highest mode average across all businesses.

Manufacturing businesses have the second-highest multiple of all the categories in this article, coming in with an average of 3.44X for the past 5 years. Manufacturing businesses are high-cost, high-complexity, and accordingly, high-reward. They’re relatively immune to the smaller market trends that affect goods and hospitality but can be affected by bigger economic events.

Here are the data sets for each of the businesses in the manufacturing category from 2015:

Professional Services

1450 businesses were sold in this category in 2015. Of those transactions, the average multiple was 2.47X, with an average sale price of $496,787. The median (middle) sale price was $206,570 and the mode (most common) sale price was $221,285. Across the entire category, there were $86,946,584 in sales in 2015.

This category has a consistent grouping of multiples, with engineering firms leading the group at 3.5X. Insurance agencies, Charter businesses and vending companies followed up with multiples in the mid-2X range.

Professional services have had a healthy average multiple of 2.74X for the past 5 years. These are essential services and so are unlikely to see major fluctuations in value or operating costs, and indeed this category had the least variation between the average multiples of each type of business.

Here are the data sets for each of the businesses in the professional services category from 2015:

Trades

3008 businesses were sold in this category in 2015. Of those transactions, the average multiple was 2.2X, with an average sale price of $625,216. The median (middle) sale price was $370,400 and the mode (most common) sale price was $832,000. Across the entire category, there were $1,664,313524 in sales in 2015. This is one of only two categories analyzed to cross the billion-dollar mark in total transactions (the other being manufacturing, covered earlier in this post, and trades, in the following section).

This category had a range of multiples, from 1.77X up to 3X. Construction businesses had the highest multiples and average sales prices. Contractors also had high average sales prices and the lion’s share of businesses sold, followed by HVAC and plumbing businesses.

The trade category has had an average multiple of 2.53X over the past 5 years. These businesses are generally straightforward to run and staff, with moderate operating costs and moderate exposure to market and economic events.

Here are the data sets for each of the businesses in the trades category from 2015:

Automotive

3156 businesses were sold in this category in 2015. Of those transactions, the average multiple was 2.67X, with an average sale price of $678,915. The median (middle) sale price was $353,500 and the mode (most common) sale price was $668,000. Across the entire category, there were $2,136,410,684 in sales in 2015. This category was the only one to surpass the two-billion-dollar mark.

This category had healthy multiples across the board, ranging from 2.18X to 3.35X. Gas stations accounted for the largest portion of the total transactions, surpassing $1.3 billion dollars in total sales alone. Automotive dealers had the highest multiple and average sales price, followed by car parts and salvage yard businesses.

The automotive category has a very healthy average multiple from the past 5 years, coming in at 3.25X. There are over 260 million cars in the US, and Statista reports that over 7.9 million are sold every year. This is an evergreen market — people need to get around, and are conscientious of their cars. Operating costs can be high, but it’s a reliable category with a huge market.

Here are the data sets for each of the businesses in the automotive category from 2015:

Here’s a total comparison of how each of the industries performed in 2015, according to their average multiple and average sale price:

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