A main-street business in Kentucky typically sells for 1.5 to 2.5 times the owner's true annual earnings. Kentucky's selling rules are manageable, and one of them, the transitional liquor license, actually works in a seller's favor if you know to use it.
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 |
Under KRS 139.670, when a retailer sells the business or its stock of goods, the buyer must keep enough of the purchase price in reserve until the seller produces either a receipt from the Kentucky Department of Revenue showing sales tax is paid or a certificate that nothing is owed. A buyer who hands over the full price without that proof inherits the liability.
That means part of your money can sit in escrow until the paperwork lands. Start the request with the Department of Revenue as soon as the deal turns serious, and you will collect the whole price at the closing table instead of weeks later.
Kentucky courts routinely enforce non-compete agreements that are sensible in length, territory, and scope, and a covenant given by a seller who was just paid for goodwill gets a sympathetic hearing. If the agreement says five years and thirty miles, plan your next chapter around exactly that. Before you sign, have a licensed Kentucky attorney review it. One flat-fee engagement at closing is standard and can come out of the proceeds.
Your buyer cannot pour a single drink on your ABC license. Kentucky requires the new owner to obtain their own license, and if a quota retail license is being acquired, you as the seller sign your part of the buyer's application. The state softens the gap with a transitional license, which lets a buyer of an ongoing business keep an active license while their regular application is pending.
Few first-time buyers know the transitional license exists. Pointing yours to it keeps revenue flowing through the handover, which protects the price you negotiated.
Round up three years of business tax returns now, not when a buyer asks. SBA lenders finance a large share of main-street purchases, and three years of returns is their entry requirement. Then run your free range below and get it documented before you talk numbers with anybody.
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.