A main-street business in North Dakota typically sells for 1.5 to 2.5 times the owner's true annual earnings. Fargo or Minot, the formula is the same. What makes North Dakota unusual is its non-compete law, which bans almost every restraint except the one that matters in your sale.
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 |
North Dakota is one of the strictest states in the country on non-competes. Its statute voids contracts that keep someone from practicing their trade, which is why employers here rarely bother with them. But the law carves out a specific exception for you: someone who sells the goodwill of a business may agree to stay out of a similar business in a reasonable area, for as long as the buyer keeps running it.
In plain terms, the non-compete your buyer asks you to sign at closing is enforceable even though most non-competes in this state are not. Take its boundaries seriously, and have a licensed attorney confirm the terms fit the statute before you sign. That is usually one flat-fee engagement, payable out of the sale proceeds.
North Dakota holds the person who buys a business responsible for its outstanding sales and use tax once the purchase closes. Smart buyers contact the Office of the State Tax Commissioner to check your account status before wiring money, and many hold back part of the price until you show proof everything is paid.
You can take that friction off the table. File every return, pay any balance, and be ready to hand over proof that your account is clean. A tidy tax file speeds up closing and keeps your full price in your pocket.
In North Dakota, any construction, repair, or alteration job of 4,000 dollars or more requires a state contractor license, issued in four classes based on contract size. That license is tied to the license holder and will not pass to your buyer with the trucks and tools. If your buyer plans to keep bidding work, they need their own license in hand at closing, or the business goes quiet the day after. Put their application on the deal timeline early.
Line up three years of business tax returns now, not when a buyer asks. SBA lenders require that three-year history before financing a purchase, and financed buyers are how most small businesses actually sell. Run your free range below and get a documented number before you name 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.