A main-street business in Arkansas typically sells for 1.5 to 2.5 times the owner's true annual earnings. Getting to that number is step one. Step two is clearing the Arkansas-specific hurdles that decide whether your closing happens on time.
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 |
In Arkansas, a buyer who takes over your business can be held responsible for any sales and use tax you left unpaid. The Department of Finance and Administration itself advises buyers to check a business's tax status before acquiring it, and careful buyers do exactly that.
As the seller, get ahead of it. Contact DFA, confirm your account is current, and be ready to show written proof that your returns are filed and paid. Show up without that proof and your buyer's attorney will insist on holding back part of your money in escrow until the state confirms you owe nothing.
Arkansas passed a statute in 2015 spelling out when employee non-competes are enforceable, but a covenant you give as the seller of a business is judged under the older common-law test: is it reasonable in time and territory? Courts here regularly answer yes when the covenant protects goodwill a buyer just paid for. So when your buyer asks you to stay out of the market for a few years, negotiate the specifics rather than assuming a court will bail you out later. Have a licensed Arkansas attorney read it. That is typically one flat fee, easily covered by sale proceeds.
Arkansas alcohol permits are not transferable. When a restaurant, liquor store, or bar changes hands, the new owner submits a fresh application to Alcoholic Beverage Control and waits for approval. Nothing carries over from your permit.
Arkansas adds a twist most states do not have: a patchwork of dry counties where private club permits are the only route to serving alcohol. If your business depends on one, walk your buyer through how it works and have their application moving well before closing day.
Assemble three years of business tax returns now, even if a sale feels far away. When your buyer applies for an SBA loan, and most small business buyers do, the lender will demand those three years before approving anything. Use the free calculator below for your range, then have the number written up before you float a price.
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.