A main-street business in Illinois typically sells for 1.5 to 2.5 times the owner's true annual earnings. Illinois layers a formal bulk sales process on top of the deal, with a filing deadline that runs before closing, and buyers' attorneys here follow it to the letter.
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 | 1.9 to 3.1 times owner earnings |
| Retail shop | 0.3 to 0.6 times yearly revenue | 1.8 to 3 times owner earnings |
| Other service business | 0.35 to 0.7 times yearly revenue | 1.5 to 2.5 times owner earnings |
When a business sells most of its assets in Illinois, Form CBS-1, the Notice of Sale, Purchase, or Transfer of Business Assets, must reach the Illinois Department of Revenue at least ten business days before the sale. The department then issues a bulk sales stop order that either names an amount the buyer must hold back from the price or confirms nothing is owed.
A buyer who closes without this step can be held personally liable for your unpaid state taxes up to the value of the assets they bought, so no well-advised buyer will skip it. Chicago runs its own separate bulk sale check for city taxes. Put both on the deal calendar the day you sign a letter of intent, because the clock does not start until the paperwork is in.
Illinois voids non-competes for employees earning under $75,000 a year under the Freedom to Work Act, and sellers sometimes assume that shield covers them too. It does not. The Act expressly carves out covenants signed as part of the sale of a business, so the non-compete your buyer asks for will be judged on ordinary reasonableness and, if reasonable, enforced. Read the years and the radius as promises you will actually keep, and have an Illinois attorney review the language. One flat-fee review at closing is the normal arrangement.
Illinois liquor licenses are not transferable. Your buyer needs their own local license from the municipality and their own state license from the Illinois Liquor Control Commission. There is one helpful wrinkle for restaurants: a brand-new owner can qualify for a retail license when the premises operated as a licensed restaurant during the months before the change of ownership.
Local licensing is where the time goes, especially in Chicago. Have your buyer open their local application well before closing so the taps never sit dry between owners.
Start by pulling three years of business tax returns. Nearly every small business sale leans on an SBA loan or seller financing, and SBA lenders require those three years before they will fund a buyer. Check your free range below, then get your valuation in writing before you name a figure to anyone.
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.