A main-street business in Colorado typically sells for 1.5 to 2.5 times the owner's true annual earnings. That range holds from Denver to Durango. What varies is the paperwork Colorado expects at closing, and three pieces of it deserve a spot on your calendar now.
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 |
Colorado makes a business buyer withhold enough of the purchase money to cover any sales tax you have not paid, and they can only release it once the Department of Revenue confirms your account is clean. The document that does this is a tax status letter, requested on form DR 0096 for a small fee per tax type. Either you request it for the buyer, or the buyer requests it with your power of attorney.
Timing matters more than sellers expect. After you close, you have only a short window to file your final sales tax return, and if tax goes unpaid, both you and your buyer can end up personally liable. Request the letter early and file that final return immediately.
Colorado law voids the typical employee non-compete unless the worker is highly paid. Selling a business is different. The statute has always carved out covenants tied to the purchase and sale of a business or its assets, so the non-compete your buyer asks you to sign is enforceable if its terms are reasonable.
A 2025 update added duration limits for some minority owners who received their stake as equity compensation. If you own the whole company and are selling it outright, the traditional rule still applies to you, but this is precisely the kind of moving target that justifies one flat-fee review by a licensed Colorado attorney at closing.
Colorado licenses alcohol at two levels. A transfer of ownership has to clear both the local licensing authority, your city or county, and the state. That dual track takes time, and a restaurant or bar cannot legally operate on your license after the sale.
The saving grace is Colorado's temporary permit, which can let your buyer keep serving while the full transfer is pending. Make sure the transfer application and the temporary permit request go in right after signing, so the taps never shut off between owners.
Round up your last three years of business tax returns. They are the first thing an SBA lender asks for when your buyer applies for financing, and SBA loans and seller notes fund most Colorado main-street deals. Run the free calculator below to see your range, then get your number documented before you quote anyone 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.