A main-street business in Montana typically sells for 1.5 to 2.5 times the owner's true annual earnings. Montana has no general sales tax, which deletes a whole category of closing paperwork other states require. What it does have is one of the country's strictest non-compete statutes and a liquor license market that runs on quotas.
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 |
Most states force business buyers to escrow money against a seller's unpaid sales tax. Montana collects no general sales tax, so that entire clearance ritual does not exist here. Your buyer's diligence will focus instead on payroll withholding and unemployment insurance accounts, so keep those filings current and the tax portion of your closing is nearly paperwork-free.
Montana statute makes contracts that restrain someone from practicing a trade generally void. Selling a business is the big exception. Under section 28-2-704, a person who sells the goodwill of a business may agree to stay out of a similar business, and the statute itself defines where: the city or county of the business's principal office and the adjacent counties.
That geographic list is a gift to sellers. A buyer cannot lock you out of the whole state, only the area the statute allows. Have a licensed attorney confirm the covenant stays inside those lines before you sign.
Montana caps liquor licenses by quota, so an all-beverages license usually changes hands only when someone buys an existing one. Every transfer needs Department of Revenue approval, and reviews are measured in months, not weeks. If a license is part of your sale, treat it as its own asset with its own price, and start the transfer application alongside the purchase agreement, not after it.
Assemble three years of business tax returns before you list. Buyers who borrow through SBA lenders cannot get approved without them, and seller financing plus SBA loans fund most small purchases. Run your free range below, then have the figure documented before quoting anyone a number.
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.