A main-street business in Arizona typically sells for 1.5 to 2.5 times the owner's true annual earnings. The multiple is universal. Arizona layers its own tax and licensing quirks on top of it, and knowing them early keeps your closing on schedule.
Your tax returns almost always prove a higher number.
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| Business type | Revenue multiple | Owner-earnings (SDE) multiple |
|---|---|---|
| Hair salon / Barbershop | 0.35 to 0.65 times yearly revenue | 1.5 to 2.5 times owner earnings |
| Cleaning service | 0.5 to 0.9 times yearly revenue | 1.8 to 2.8 times owner earnings |
| Landscaping / Lawn care | 0.45 to 0.85 times yearly revenue | 1.8 to 2.8 times owner earnings |
| Restaurant / Cafe | 0.25 to 0.45 times yearly revenue | 1.3 to 2.2 times owner earnings |
| Auto repair / Detailing | 0.4 to 0.75 times yearly revenue | 1.7 to 2.6 times owner earnings |
| Retail shop | 0.3 to 0.6 times yearly revenue | 1.5 to 2.3 times owner earnings |
| Other service business | 0.35 to 0.7 times yearly revenue | 1.5 to 2.5 times owner earnings |
Arizona does not technically have a sales tax. It has a transaction privilege tax, a tax on the business itself, and that distinction matters when you sell. Under A.R.S. 42-1110, your buyer must hold back enough of the purchase money to cover any unpaid TPT until you hand over a receipt from the Department of Revenue or a certificate showing your account is clean. The department is required to answer a certificate request within fifteen days, so there is no excuse for waiting until the last week.
One more wrinkle: your TPT license cannot be handed to the buyer. They register for their own license before their first day. Point this out early so the transition does not stall over paperwork neither side saw coming.
Arizona has no statute that bans non-competes, and its courts draw a sharp line between covenants squeezed onto employees and covenants signed by someone selling a business. When you sell, the buyer is paying for your goodwill, so Arizona judges give a seller's covenant considerably more room. Treat the mileage radius and the number of years as binding commitments, because they almost certainly will be. This is a spot worth one flat-fee session with a licensed Arizona attorney before you sign anything.
If you run a licensed trade, know that an Arizona Registrar of Contractors license belongs to your specific entity and its qualifying party. A buyer who purchases your assets cannot borrow your license. They need their own, which means their own qualifying party who meets the experience and exam requirements.
That process can take months for a buyer coming from outside the trade. Surface it in the first conversation, not the last one, and structure the timeline so licensed work never has to pause.
Gather your business tax returns for the past three years. SBA lenders finance a large share of Arizona small business purchases, and they will not underwrite a buyer without three years of the seller's returns. Check your free range below, then get the number documented before a single buyer hears a price from you.
Most main-street businesses sell for 1.5 to 2.5 times the owner's true yearly earnings, or their replacement value, whichever is higher and can be proven. True earnings means salary plus profit plus the personal things the business pays for. Most owners forget those add-backs count, so most owners guess low.
SBA lenders require three years of business tax returns to finance a buyer. Three years also shows a trend, not a snapshot. We saw a salon whose latest year looked like decline. Three years proved it was one expensive staffing year, and that was worth tens of thousands on her price. Fewer years looks like hiding. More rarely changes the number.
No. YourBizWorth is not a broker, appraiser, or law firm. We prepare your analysis and drafts. We flag exactly which steps need a licensed attorney, usually one flat-fee engagement at closing, often payable from the sale money. We make the lawyer cheaper, not absent.