A main-street business in New Jersey typically sells for 1.5 to 2.5 times the owner's true annual earnings. New Jersey runs the strictest bulk sale program in the country, and the ten business day clock it puts in front of your closing is not a suggestion. Respect it and the rest of the sale behaves normally.
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 |
New Jersey's bulk sale law, N.J.S.A. 54:50-38, makes a buyer responsible for all of a seller's state tax debts unless the buyer notifies the Division of Taxation before closing. The notice goes in on Form C-9600 with a copy of the sale contract, at least ten business days before closing, sent by registered, certified, or overnight mail. The Division answers within ten business days, usually naming an amount to hold in escrow.
Closing early without that escrow shifts your entire tax history onto the buyer, which is why no New Jersey deal lawyer will allow it. Build the notice window into your timeline from the start, and keep your state tax accounts current so the escrow the Division names is small and released fast.
New Jersey caps consumption licenses at roughly one per 3,000 town residents, which is why they trade for serious money. Moving one to your buyer is a person-to-person transfer that needs approval from both the municipal governing body and the state ABC, complete with background checks and a vote at a public meeting.
There is a tax gate here too. The municipality cannot approve the transfer until the buyer holds a clearance certificate from the Division of Taxation for the license. Start the liquor paperwork the same week you sign the contract.
New Jersey courts uphold non-competes with reasonable limits, and they give the most latitude to covenants signed by someone selling a business and its goodwill. Whatever years and radius appear in your agreement, plan your next chapter around them. One flat-fee session with a licensed attorney before signing is the right amount of caution.
Set aside three years of business tax returns today. An SBA lender will require them before approving your buyer's loan, and SBA financing plus seller notes power most small business sales. Run the free range below and get your number documented before the first offer 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.