A main-street business in Minnesota typically sells for 1.5 to 2.5 times the owner's true annual earnings. Minnesota rewrote its non-compete law in 2023, and sellers often assume it protects them more than it does. The bigger surprises are a tax lien notice rule and a hard licensing deadline for salons.
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 |
Minnesota banned most employment non-competes effective July 1, 2023, under Minnesota Statutes section 181.988. The ban does not reach you as a seller. The statute keeps an exception for the sale of a business, so your buyer can still require you to stay out of a similar business for a reasonable time in a reasonable area, and Minnesota courts will hold you to it. This is a spot where one flat-fee attorney review earns its keep.
Minnesota's successor liability rule turns on liens. If the Department of Revenue has filed a lien against your business for unpaid taxes, your buyer must notify the state at least 20 days before paying you or taking possession of the assets, and hold back enough of the price to cover the debt.
The practical move is to find out now whether a lien exists and pay off any balance before you list. A deal with no lien on file skips the notice period entirely, while a buyer who finds one late will push your closing back or demand a holdback.
A Minnesota salon license does not follow the business to a new owner. After an ownership change, the buyer has 60 days to obtain their own license from the Board of Cosmetologist Examiners. On day 61 without one, the salon must stop operating. Have your buyer file their application at signing, not at closing, so the shop never misses a week.
Dig out three years of business tax returns before anything else. SBA lenders require them to finance a buyer, and the majority of small sales close with SBA money or seller financing behind them. Run the free range below, then get your number in writing before you start negotiating.
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.