A main-street business in Iowa typically sells for 1.5 to 2.5 times the owner's true annual earnings. Iowa asks for less paperwork than neighboring states when you sell, but the successor liability burden lands squarely on your buyer, and sellers who make that step easy close faster.
Your tax returns almost always prove a higher number.
Upload three years of tax returns, about 15 minutes of your time. A real person reads every page and your package is delivered within 48 hours. If your package isn't right, you don't pay: full refund any time before we deliver, and after delivery we fix the numbers or refund you.
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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 |
Iowa has no pre-closing notice to file with the state, which surprises owners who hear horror stories from Illinois. Instead, Iowa Code section 423.33 tells your buyer to ask whether you owe sales or use tax and to hold back enough of the purchase price to cover anything delinquent. A buyer who fails to withhold can end up personally liable for your unpaid tax, penalty, and interest.
Iowa gives buyers a clean way out: a certified statement from you, sworn before a notary, that no delinquent tax is owed as of the sale date. Expect your buyer's attorney to put that document in front of you. Bring current filings to the table and be ready to sign it, because that one page is Iowa's whole clearance process for most small deals.
Iowa has no non-compete statute. Courts weigh whether the restriction is reasonable and no broader than needed, and they lean toward enforcement when the covenant rides along with a business sale, since the buyer paid you for the goodwill it protects. Do not sign years or miles you cannot live with. A licensed Iowa attorney should read the covenant before closing, typically as a single flat-fee engagement.
In Iowa, a change of ownership means a new salon license application to the state's barbering and cosmetology board, and the application is supposed to go in about 30 days before the new owner opens the doors. The license you hold does not simply carry over. Put the application date on the deal calendar so the chairs never sit empty between owners.
Locate your last three years of business tax returns and keep them together. When a buyer goes to an SBA lender for financing, which is how most main-street deals get funded, the lender will ask for exactly those three years. Run the free calculator below and get your range documented before you quote a price out loud.
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.