A main-street business in Indiana typically sells for 1.5 to 2.5 times the owner's true annual earnings. Indiana rewrote its bulk transfer rules in 2024, so advice from owners who sold a few years ago can steer you wrong. The new timeline is longer than most small deals expect.
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 |
For deals closing on or after February 14, 2024, Indiana requires a Notice of Transfer in Bulk to be filed with the Department of Revenue at least 45 days before the buyer pays or takes possession, whenever more than half of a business's tangible personal property changes hands. If your accounts are clean, the department mails a tax clearance letter within about 20 days, and that letter is only good for 60 days, so the closing has to land inside the window.
A buyer who closes before the clearance arrives can be held liable for your past-due Indiana taxes up to the purchase price. Forty-five days is longer than many handshake deals plan for. Count backward from your target closing date and file the notice first, not last.
Indiana courts enforce non-competes that are reasonable in duration, geography, and scope of activity, and they review a covenant attached to the sale of a business more generously than one imposed on an employee, because you were paid for the goodwill you are agreeing to protect. Assume the restriction will stand as written. This is the moment to bring in a licensed Indiana attorney for a fixed-fee review, usually payable out of the closing proceeds.
Unlike many states, Indiana alcohol permits can move to a new owner, but only with Alcohol and Tobacco Commission approval. The quota system makes three-way permits genuinely scarce in populated counties, which is why buying an existing permit is often the only practical path, and why your permit can carry real value in the sale.
The catch: the ATC will not approve a transfer until the seller's sales and property taxes are paid and any pending violations are resolved. Your tax accounts gate the permit, and the permit gates the deal. Clean everything up before the transfer application goes in.
Dig out your last three years of business tax returns. SBA lenders ask for three years of returns before financing a buyer, and most main-street purchases run through an SBA loan or seller note. Get your free range below, then have your number documented before the first buyer conversation.
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.