Does Your Industry Change What Your Business Is Worth?
By Troy Frank, Owner — Indiana Equity Brokers
[Estimated read time: 6 min]
The short answer: Your industry sets the range your business will sell in. The quality of your business decides where you land in that range. Across major sectors, small businesses sell for about 2 to 3.3 times their annual earnings, according to BizBuySell data from 2021 to 2026. But two companies in the same industry can easily sell a full multiple apart. Owner dependence, recurring revenue, customer concentration, and clean books usually matter more than the industry itself.
“Is anybody even buying businesses like mine?”
I hear that question every week. From restaurant owners. From machine shop owners. From a landscaper who read that private equity only wants HVAC companies.
It’s a fair question. Industry does move the numbers. But it moves them less than most owners think. This article covers business valuation by industry — what the data shows, why the spread inside an industry is often bigger than the spread between industries, and what buyers in Indiana look for no matter what you do.
Business Valuation by Industry: What the Numbers Show
BizBuySell tracks closed small business sales across the country. Its industry multiples data covers sales from Q3 2021 through Q2 2026. Here’s a sample of average earnings multiples:
| Industry | Earnings multiple |
|---|---|
| Car washes | 4.87x |
| Assisted living | 4.30x |
| Online and technology (sector) | 3.28x |
| Insurance agencies | 2.87x |
| Restaurants | 2.18x |
| Transportation and storage (sector) | 1.95x |
| Dollar stores | 1.46x |
Across the broad sectors, averages run from about 2 to 3.3 times earnings. The overall average for businesses sold in Q2 2026 was about 2.7 times.
So yes, industry matters. A car wash earning $300,000 might trade near $1.4 million. A restaurant earning the same might trade near $650,000.
Why Some Industries Earn Higher Multiples
The high-multiple industries share a few traits. Revenue repeats without a lot of selling. The business doesn’t depend on one skilled owner. Customers have few reasons to leave. Assets hold their value.
The low-multiple industries share the opposite traits. Thin margins. High competition. Lots of owner labor. Easy for customers to switch.
Notice something? Those are traits of a business, not just an industry. That’s the key.
Why Your Business Matters More Than Your Industry
An industry average is just that — an average. It blends the best shop in the state with the worst one.
Take two HVAC companies in Central Indiana. Same revenue. Same trucks.
The first has 1,200 customers on annual maintenance agreements. A service manager runs dispatch. The owner hasn’t been on a job in three years.
The second has no agreements. The owner quotes every job, answers every call, and knows every customer by name.
These two businesses don’t sell for the same multiple. In our experience, the gap is often a full turn of earnings or more. On $400,000 of SDE, that’s $400,000 or more in price. Same industry. Very different outcome.
Buyers of every type — individuals, investors, and competitors — tend to judge a business on the same core factors:
- Consistent profit. Three steady years beat one great year.
- Recurring or repeat revenue. Contracts, service agreements, repeat customers.
- Low owner dependence. A team and systems that run without you.
- No customer concentration. No single customer above 15% to 20% of revenue.
- Clean, verifiable books. Financials that match the tax returns.
We go deeper on these in what makes a business worth more.
Myth vs. Reality: “My Industry Is Hot, So My Business Will Sell Itself”
The myth: Buyers are chasing my industry, so any business in it will sell fast at a premium.
The reality: A hot industry brings more buyers to look. It doesn’t make them less careful.
Buyers in popular sectors often have more choices. That makes them pickier, not less. A struggling company in a hot industry still gets passed over for a well-run one.
The reverse is also true. Restaurants have some of the lowest average multiples. But a restaurant with strong, documented cash flow and a solid lease still sells. BizBuySell reports that restaurant cash flow multiples actually rose 5% year over year in Q2 2026.
Your industry opens the door. Your numbers decide whether a buyer walks through it.
What This Means for Indiana Business Owners
Indiana’s economy has its own shape. Manufacturing makes up about 24% of the state’s GDP — the highest share of any state, according to Visual Capitalist’s 2025 analysis.
That shows up in deal activity. Manufacturers draw strategic buyers and private equity groups. Nationally, the median manufacturing business sold for $704,500 in Q2 2026. But those deals also took longer — a median of 247 days on market, compared with 155 for service businesses.
In our practice, the steadiest buyer demand is for essential service businesses. Think HVAC, plumbing, electrical, commercial cleaning, and business-to-business services. Buyers like work that has to get done in any economy.
But we’ve also sold retail stores, restaurants, and franchises at strong prices. The common thread was never the industry. It was a business that could run and profit without the seller.
What You Can Control Before You Sell
You can’t change your industry. You can change almost everything else. Give yourself 12 to 24 months if you can.
- Get out of the middle. Hand off customers, pricing, and daily decisions.
- Lock in repeat revenue. Turn one-time customers into agreements.
- Spread out your customers. Reduce reliance on your biggest account.
- Clean up the books. Pull personal expenses. Document every add-back.
- Write down how things work. A documented process is an asset. One in your head is a risk.
Each of these moves you up within your industry’s range. Together, they can be worth more than switching industries ever could. Much of that extra value shows up as goodwill in your sale price.
Frequently Asked Questions
Does your industry affect what your business is worth?
Yes, but less than most owners think. Industry sets a general range — most small business sectors sell for about 2 to 3.3 times annual earnings. Where a specific business lands in that range depends on its profitability, owner dependence, recurring revenue, and financial records.
What industries have the highest business valuation multiples?
BizBuySell data from 2021 to 2026 shows car washes at about 4.9 times earnings and assisted living at about 4.3 times. Online and technology businesses led the broad sectors at about 3.3 times. These industries tend to have repeat revenue and less reliance on the owner.
Can I sell a business in a low-multiple industry like restaurants?
Yes. Restaurants average around 2.2 times earnings, but well-run restaurants with documented cash flow and a solid lease sell regularly. BizBuySell reported restaurant cash flow multiples rose 5% year over year in Q2 2026. Business quality matters more than the industry label.
What types of businesses are buyers looking for in Indiana?
In our experience, buyers show the steadiest demand for essential service businesses such as HVAC, plumbing, electrical, and commercial services. Indiana manufacturers also draw strategic and private equity buyers. In every industry, buyers favor businesses with consistent profits and low dependence on the owner.
How can I increase my business’s value before selling?
Focus on the factors buyers pay for: reduce your personal role in daily operations, build recurring revenue, spread revenue across more customers, clean up your financial records, and document your processes. Most owners need 12 to 24 months for these changes to show up in the numbers.
Your Industry Is the Starting Point
Industry sets the range. Your business sets the price. The owners who get top dollar aren’t always in the hottest sector. They run the best business in theirs.
Indiana Equity Brokers has closed more than 884 business sales and over $816 million in transactions across Indiana, in nearly every industry. If you want to know where your business sits in its range — and what would move it up — a confidential conversation costs nothing. Reach Troy Frank at troy@indianaequitybrokers.com, call (317) 333-6655, or schedule a call at indianaequitybrokers.com.
