Valuations for Business Sold for Under $1,000,000

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A recent report from Business Valuation Resources of the 4Q 2013 Pratt’s Stats Private Deal Update reports the following pricing/valuation multiples of EBITDA used on sales made by business brokers, of businesses that sold for under $1,000,000:

2013 = 2.40
2012 = 2.36
2011 = 2.50
2010 = 2.34
2009 = 2.35
2008 = 2.58
2007 = 3.73
2006 = 4.15
2005 = 4.05

As you can see the changes in the multiples of EBITDA have had impact on the expectations of sellers.  Sellers I have run across often don’t like the current multiples/pricing and think their business is worth more than the market will bring.  The  challenge is because many business owners expect to receive multiples of EBITDA that simply are not happening, like they were pre-recession.