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Price Multiples

Multipliers over time

Multiples are how we figure a go to market price. Price it too high and there is no interest, price it too low and you may not get top dollar.

In contrast, small business buyer confidence has risen to a score of 54 in 2022, up from 48 in 2021, after a high of 60 in 2020 when buyers found opportunities, such as thriving essential businesses in unique pandemic conditions. In today’s market (73%) are confident they can buy a business for an acceptable price, with 53% citing economic uncertainty as the top factor. In addition, most buyers (52%) believe economic uncertainty is a reason for a discounted purchase price.

However optimistic, 37% of buyers feel they would have been better off purchasing a business last year. With rising interest rates and the high cost of acquisitions, 41% feeling it may be difficult to make a purchase. Business values are another issue, with 42% attributing owners setting unrealistic prices as the top factor to less acceptable prices. Most (48%) believe they would get a better deal if they waited a year. Similar to the housing market, this leaves buyers in a dilemma of waiting for a better sale price verses paying the additional costs associated with higher interest rates.

BizBuySell Insight Report 10-19-2022