Reprinted by permission of Business Brokerage Press
The following 2011 data is supplied from The Business Reference Guide published by Business Brokerage Press. This is an excellent resource for any individual involved in valuing, buying or selling privately held businesses. This 700 page guide also details reasoning, alternative methods, outside references and pricing tips for valuing small businesses - as well as the limitations of relying on rules of thumb. We have included only a selected portion of the businesses covered and methods outlined within the guide.
| Industry | "Rule of Thumb" Valuation |
|---|---|
| Accounting Firms | 100–125% of annual revenues |
| Auto Dealers (New Cars) | 0–10% of annual sales + inventory |
| Book Stores | 15% of annual sales + inventory |
| Coffee Shops (Gourmet) | 40% of annual sales + inventory |
| Day Care Centers | 45–50% of annual sales incl. inventory |
| Dental Practices | 60–65% of annual revenues incl. inventory |
| Dry Cleaners | 70–80% of annual sales + Inventory |
| Engineering Services | 40–45% of annual revenues |
| Flower Shops | 30–35% of annual sales + inventory |
| Food Shops (Gourmet) | 30% of annual sales + inventory |
| Gas Stations (w/o C-Store) | 15–20% of annual sales + inventory |
| Gift/Card Shops | 35% of annual sales incl. inventory |
| Grocery Store (Supermarket) | 15% of annuals sales + inventory |
| Hardware Stores | 45% of annual sales incl. inventory |
| Insurance Agencies | 125–150% of annual revenues |
| Landscape Businesses | 45% of annual sales |
| Law Practices | 90–100% of annuals revenues |
| Liquor Stores | 40–45% of annuals sales + inventory |
| Restaurants (Full-Serve) | 30–35% of annuals sales + inventory |
| Restaurants (Ltd-Serve) | 30–40% of annuals sales + inventory |
| Sporting Goods Stores | 25% of annual sales + inventory |
| Taverns/Bars | 40% of annuals sales + inventory |
| Travel Agencies | 35–40% of annual commissions |
| Veterinary Practices | 70% of annual revenues + inventory |
