A main-street business in Washington typically sells for 1.5 to 2.5 times the owner's true annual earnings. Washington skips the income tax but runs everything through the B&O tax on gross receipts, and its successor liability rule puts a six-month clock on your sale. Two other rules matter for sellers here.
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 |
Washington taxes businesses on gross receipts through the business and occupation tax rather than on income. When you sell or quit the business, everything you owe the Department of Revenue comes due fast, and your buyer is required to withhold enough of the purchase price to cover it until you produce a receipt showing full payment or a certificate that nothing is due.
There is a built-in escape valve buyers use: written notice of the acquisition to the Department of Revenue. If the department does not issue an assessment against you within six months of that notice, the buyer is released. In practice that means part of your money may sit in escrow for months unless your excise account is spotless going in. File your final returns early and get the clearance moving before closing week.
Washington sharply restricts non-competes for employees, including an earnings floor below which they are void. Sellers are a different category. The statute excludes people who are selling or disposing of their ownership interest in a business, so the covenant in your purchase agreement is enforceable as long as it stays reasonable in years and geography. Read it as a real promise, and have a licensed Washington attorney review it, usually one flat-fee engagement settled at closing.
If you run a construction business, your contractor registration with the Department of Labor and Industries belongs to your entity and its principals. In an asset sale it does not transfer. Your buyer registers their own entity, which means posting their own bond and carrying their own insurance before they can lawfully take over your jobs.
Schedule around this. A buyer who closes without an active registration cannot bid or work, and unfinished contracts get awkward fast. Make the new registration a pre-closing checklist item, not an afterthought.
Round up three years of business tax returns before you test the market. Most small business purchases here run on SBA loans or seller financing, and SBA lenders will not approve a buyer without three years of returns. Grab your free range below and turn it into a documented number before naming your price.
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.