Valuation
What a business is actually worth.
How Canadian businesses are valued — the earnings measures buyers use, what moves a multiple up or down, and why the number a lender will support is the one that matters.
Guides
- What is a farm business worth?A farm’s worth is the sum of three separately valued pieces — land valued against comparable farmland sales, equipment valued at appraised resale value rather than book value, and quota valued (where it applies) under the provincial marketing board’s own pricing rules — plus whatever the operating business earns above what the land and equipment alone would return.
- What is an AI business worth?An AI business is worth what its provable, owned assets can defensibly earn — recurring revenue from customers who aren’t easily replaced by a generic tool, built on data and IP the seller can prove it owns — and a thin wrapper around someone else’s API is priced well below a business built on proprietary data and a defensible model, even at similar revenue.
- What is an auto repair business worth?An auto repair business is worth what a buyer will pay for its normalized discretionary earnings, adjusted for equipment condition, lease security, licensing risk and how dependent the shop is on the current owner — not simply a multiple applied to revenue.
- What is an e-commerce business worth?An e-commerce business is worth what a buyer will pay for its normalized discretionary earnings, weighted by how recurring the revenue is and how exposed the store is to a single platform, supplier or the owner personally — not simply a multiple of sales.
- What is a healthcare practice worth?A healthcare practice is generally valued on its normalized earnings, adjusted for owner compensation and one-time items, then weighed against how much of its patient base and revenue depend on the current practitioner personally. No single multiple or formula applies to every practice.
- What is a software business worth?A software business is generally valued on the quality and predictability of its revenue, how fast it is growing, how much of that revenue it keeps after costs, and how concentrated it is among a small number of customers, more than on the size of revenue alone.
- Business valuation methods comparedCanadian businesses are valued using three distinct method families — asset-based, income-based and market-based — each measuring something different, needing different inputs, and often producing a different number for the same business, which is why the method matters as much as the arithmetic.
- What drives a business valuation multipleA multiple moves with how much risk a buyer assigns to the earnings behind it: owner dependence, customer and supplier concentration, revenue recurrence, margin durability, growth credibility, transferable licences and relationships, record quality, and how many real buyers could complete the purchase set the number — not the industry a business sits in, and not a fixed rule of thumb.
- What is my business worth?A buyer pays for your business’s normalized earnings — or its net assets, for an asset-heavy operation — run through a multiple that reflects how risky those future earnings look, not for what the business has cost you in time or money, which is why a buyer’s number is so often lower than the number an owner has in mind.
- What is a retail business worth?A retail business is typically valued off its seller discretionary earnings, with inventory priced and paid for separately at closing rather than folded into the headline number, and the resulting multiple moves with lease strength, sales trend, owner dependence and how replaceable the location and supplier terms are.
- What is a professional practice worth?A professional practice is typically valued off its recurring, normalized earnings, weighted heavily by how likely clients are to stay once the founder steps back, since the asset is the relationship and the fee base rather than equipment or inventory, and a low-retention or founder-dependent book is priced accordingly.
- What is a marketing agency worth?A marketing agency is generally valued on its normalized earnings, discounted for client concentration, the mix of retainer versus project revenue, and how dependent client relationships are on the founder rather than the wider team. No fixed multiple applies to every agency.
- What is a staffing agency worth?A staffing agency is valued on its normalized earnings and margin spread rather than headline placement revenue, then adjusted for how the payroll-funding facility is structured, client concentration, and compliance history with employment standards and workers’ compensation.
- What is an insurance brokerage worth?An insurance brokerage is valued primarily on its book of business — the recurring commission stream from its client relationships and carrier contracts — adjusted for client concentration, retention history and how much contingent or profit-sharing income is genuinely recurring.
- What is a distribution business worth?A distribution business is valued on its normalized earnings after separating out inventory, which is typically priced and settled on its own at closing rather than folded into a multiple, then adjusted for supplier-agreement risk, customer concentration and working capital intensity.
- What is a gym or fitness business worth?A gym or fitness business is typically valued off normalized earnings driven by active membership count, average retention and ancillary revenue such as personal training and retail, discounted for outstanding equipment lease obligations and how tied member relationships are to a specific instructor.
- What is a salon or spa worth?A salon or spa is typically valued off normalized earnings from services and retail combined, weighted heavily by whether stylists and technicians are employees whose clients transfer with the business or independent chair renters whose clients may not.
- What is a daycare business worth?A daycare business is typically valued off normalized earnings driven by enrolment relative to licensed capacity, the durability of any subsidy or funding agreements, and how tightly required staff-to-child ratios constrain the cost structure, rather than off revenue or waitlist length alone.
- What is a laundromat worth?A laundromat or dry-cleaning business is typically valued off normalized earnings after accounting for equipment age, utility costs and any environmental exposure from historical dry-cleaning solvent use, rather than off revenue alone, since two similar-looking stores can carry very different real operating costs.
- What is a cleaning business worth?A cleaning business is worth what a buyer will pay for its durable, recurring contract revenue after adjusting for client concentration, labour cost pressure and how dependent the accounts are on the current owner personally — not a fixed multiple applied to revenue.
- What is a landscaping business worth?A landscaping business is worth what a buyer will pay for its normalized earnings across a full seasonal cycle, adjusted for how much of that revenue is recurring maintenance versus one-off work, the fleet’s remaining useful life, and how much the operation depends on the owner or a key crew lead.
- What is a self-storage business worth?A self-storage business is typically valued closer to income-producing real estate than a small business, using net operating income capitalized at a market rate rather than a discretionary-earnings multiple, adjusted for occupancy, achievable rate growth, and the physical condition of the facility.
- What is a car wash worth?A car wash is worth what a buyer will pay for its normalized, weather-adjusted earnings, discounted for the tunnel and equipment’s remaining useful life and any unresolved environmental or discharge-permit issues, and increased where a stable, verifiable membership base makes the revenue more predictable.
- What is a brewery worth?A brewery is generally valued on a blend of its production and distribution earnings and, separately, the replacement cost and utilized capacity of its brewing and packaging equipment, adjusted for whether its liquor manufacturing licence and excise standing are current and in good order.
- What is a hotel or motel worth?A hotel or motel is generally valued through a blend of its real estate worth and its operating earnings, adjusted for brand affiliation, pending property improvement obligations, seasonality and how the property compares to others in its market.
- What is a gas station worth?A gas station is generally valued on a combination of fuel volume and margin, the strength and remaining term of its fuel-supply and branding agreement, the age and environmental standing of its storage tanks, and, separately, the value of the real estate if it is owned rather than leased.
- What is a dental practice worth?A dental practice is generally valued on normalized earnings drawn from its collections, weighted by how much production comes from the owner personally versus associates and hygiene, and by the condition of its equipment and lease — with no single multiple applying across every practice or buyer type.
- What is a veterinary practice worth?A veterinary practice is generally valued on normalized earnings per doctor, the size and loyalty of its active client base, how much revenue recurs through wellness plans rather than one-off visits, and the condition of its facility and equipment, more than on gross revenue alone.
- What is a pharmacy worth?A pharmacy is generally valued on normalized earnings driven mainly by its prescription volume, average script value and payer mix, adjusted for how much profit the front-store retail side contributes, with banner affiliation terms and location demand shaping the number further.
- What is an accounting practice worth?An accounting practice is generally valued as a multiple of annual recurring fees rather than a multiple of earnings, adjusted for how likely clients are to stay after the sale, how the fee base splits between recurring compliance work and advisory engagements, and how much the practice depends on a single owner.
- What is an advertising agency worth?An advertising agency is generally valued on normalized earnings adjusted for which fee model actually produced the revenue — media-buying commission, retainer or project fee — how transferable its media-buying trading terms and rebates are to a new owner, how solid its agency-of-record contracts are, and how much new-business success still depends on the founder’s personal profile.
- What is an aerospace parts manufacturer worth?An aerospace parts manufacturer is worth what a buyer will pay for its normalized earnings once that buyer has priced in whether its AS9100 certification and special-process approvals will survive the sale intact, how concentrated its revenue is in a single aircraft program, and whether its traceability and configuration-control systems can stand up to a new owner’s own quality audit.
- What is an automotive parts manufacturer worth?An automotive parts manufacturer is worth what a buyer will pay for its normalized earnings once that buyer has priced in how many awarded OEM programs are still early in their production life versus near end-of-platform, how much of the tooling on the shop floor the company actually owns, and whether existing price-down commitments will erode the margin the buyer is counting on.
- What Is an Affiliate Marketing Site Worth?An affiliate marketing site is worth a multiple of the trailing commission income a buyer can realistically keep after closing, and that multiple is set less by traffic or content volume than by how much of the income depends on a single merchant, an account that may not transfer, or a commission rate the site owner cannot control.
- What Is an Amazon FBA Business Worth?An Amazon FBA business is worth a multiple of its recast earnings only if the account behind it stays healthy and transferable, which is why buyers weight the seller account’s health rating, its Brand Registry status and how concentrated the catalogue is on one hero product as heavily as the profit-and-loss statement itself.
- What is an agronomy services business worth?An agronomy services business is worth what a buyer will pay for its client roster and revenue history, not its equipment, and that figure gets discounted heavily whenever the advisory relationships depend on one credentialed principal who may not stay after closing.
- What is an aquaculture operation worth?An aquaculture operation is worth what a buyer will pay chiefly for the remaining term and renewal strength of its provincial site licence or lease, with the production system, the biomass on hand, and the environmental compliance record shaping the price around that central asset.
- What is a beef cow-calf operation worth?A beef cow-calf operation’s worth splits into three separately priced pieces — the grazing land and its carrying capacity, the herd’s genetics and calving performance, and the forage and handling infrastructure that keeps both running — plus whatever the operation earns above what the land alone would return if simply leased out.
- What is a berry farm worth?A berry farm’s worth splits between its plantings — priced on age, variety and years of productive life remaining, not flat acreage — its market channel, whether a processor supply contract or a fresh, retail and u-pick business, and its irrigation and frost-protection infrastructure, each carrying its own value and its own risk.
- What is a broiler poultry farm worth?A broiler poultry farm’s worth is quota value plus barn-and-equipment value plus the earnings the operation produces above what an investor could get by simply holding the quota and leasing out the barns — three figures priced by three different methods, not one blended number.
- What is a cannabis cultivation facility worth?A cannabis cultivation facility’s worth sits mostly in the federal licence and what it authorizes, not in the building — licence class, canopy capacity, facility build quality against Health Canada’s current physical-security standard, and the strength of provincial wholesale relationships each move the number independently of the real estate underneath it.
- What is a cash crop farm worth?A cash crop farm’s worth splits into three pieces priced by different logic — the land, valued against comparable farmland sales; the equipment fleet and grain storage, valued at appraised resale rather than book value; and the operating earnings the rotation produces above what the land alone would return as rent, discounted wherever the land base is rented rather than owned.
- What is a dairy farm worth?A dairy farm’s worth splits along a line no other farm type shares — the physical operation of land, barn, milking system and herd, priced like any working farm, and production quota, priced separately under the provincial marketing board’s own rules — so the same herd and barn can be worth very different amounts depending on how much quota comes with the sale.
- What is an egg farm worth?An egg farm’s value sits mainly in its layer quota — the volume, its transferability through the provincial marketing board, and how far the barns are along the phased-in animal-care housing code — with flock health, production history and grading capability setting the price within that range, never a fixed multiple.
- What is a farm equipment dealership worth?A farm equipment dealership’s worth rests on the manufacturer’s dealer agreement more than on the building or the equipment on the lot — its brand, its territory, its remaining term and the manufacturer’s willingness to approve a new principal — with the parts-and-service revenue share, technician bench strength and the floor-plan arrangement setting the price around it.
- What is a feed mill worth?A feed mill’s value rests less on its mixing and pelleting equipment than on its licensed medicated-feed authorization, the diversity of its producer customer base, and whether its grain supply contracts survive a change of ownership.
- What is a feedlot worth?A feedlot’s worth turns on pen capacity and turnover rate, how much headroom sits in its environmental permit, its proximity to a packing plant, and whether the earnings being valued come from owned cattle or a custom-feeding fee.
- What is a grain elevator and handling facility worth?A grain elevator’s worth comes from its licensed storage capacity and throughput, the reliability of its rail-siding and carrier service, the size and loyalty of its producer catchment area, and its standing under Canadian Grain Commission bonding — not from the buildings alone.
- What is a greenhouse floriculture operation worth?A greenhouse floriculture operation’s worth comes from its structure and heating-lighting efficiency, its garden-centre and wholesale relationships, and any licensed plant varieties it grows — weighed against how much of its revenue lands inside one short spring selling season.
- What is a greenhouse vegetable operation worth?A greenhouse vegetable operation is priced mainly on the structure and its climate and lighting systems rather than the land underneath it, adjusted for the strength of its retailer contracts, the age and efficiency of its glazing and energy systems, and how cleanly its earnings separate owner labour from the operation’s true recurring profit.
- What is a hog operation worth?A hog operation is priced on its barns, its genetics, the strength and term of its processor or integrator contract, and how much manure storage and spreading land back the herd, with the barns and the herd itself typically valued and negotiated as separate pieces rather than one combined number.
- What is a honey and apiary operation worth?A honey and apiary operation is valued on colony count and health, the split between pollination-contract and honey-sales revenue, and the condition of the extraction facility — not on hive count alone, since two operations with identical hive counts can carry very different income and risk profiles.
- What is a maple syrup operation worth?A maple syrup operation is valued on tap count and tubing condition, the sugarhouse and evaporator equipment, forest health, and — in Quebec only — the production quota it holds, plus how much of its revenue comes from higher-margin retail and agritourism sales rather than bulk wholesale syrup.
- What is a mushroom farm worth?A mushroom farm’s value centres on growing-room capacity, how secure its compost supply is, and how many buyers it sells to — an operation with an owned compost yard and several retail relationships prices higher than an identical-looking farm dependent on one supplier and one grocery chain.
- What is a nursery and sod operation worth?A nursery or sod operation’s worth turns on its growing-stock inventory, its water licence and irrigation infrastructure, and whether the property sits inside a pest-quarantine zone — three things that can make two similarly sized operations worth very different amounts even when their reported revenue looks the same.
- What Is an Orchard Worth?An orchard’s value comes from its tree age and variety mix, its access to controlled-atmosphere storage, its packing-house relationship, and how much revenue comes from direct-market sales layered on wholesale — not from one blanket multiple applied to any fruit-growing operation.
- What Is a Potato Operation Worth?A potato operation’s value rests on the strength of its processor or table-market contract, its storage capacity relative to what it’s contracted to deliver, and how clean its land-rotation history is, not on a flat per-acre figure that ignores what happens to the crop after it’s dug.
- What is a sheep and goat farm worth?A sheep or goat farm’s value comes from three separately priced pieces — the flock, valued by head against its genetics and lambing or kidding record; any niche dairy, fibre or direct-market premium it earns; and the land and infrastructure — reduced by discounts for informal customer relationships, predator-loss history and limited nearby processing a buyer inherits.
- What is a vineyard worth?A vineyard’s value comes from several separately priced pieces — vine age and varietal mix, the site’s terroir reputation, any appellation standing behind its labelling rights, a winery and retail licence where the operation is integrated, and its distribution relationships — reduced for aging vines needing replanting, appellation compliance risk, and licence conditions that may not transfer to a new owner.
- What is an AI document automation business worth?An AI document automation business is worth what its evidenced extraction accuracy, its depth of integration into customers’ document systems, and the defensibility of its training data can sustain — a thin wrapper over a general-purpose model API prices well below a business with proprietary tuning, a real audit trail and sticky ERP or DMS integrations, even at comparable revenue.
- What is an AI-enabled BPO business worth?An AI-enabled BPO business is worth what its documented automation rate, its managed-service contract base and its retained, trained workforce can sustain together — a business where AI-enabled turns out to mean relabelled manual labour, once the automation claim is checked against real operating data, prices closer to a plain staffing business than to the software-like multiple its marketing suggests.
- What is an AI governance and compliance consulting practice worth?An AI governance and compliance consulting practice is worth what a buyer will pay for its retainer revenue and named-practitioner credibility, and that figure is discounted hard wherever the client relationships and the regulatory judgment behind them sit with one founder who may not stay.
- What is an AI implementation and integration business worth?An AI implementation and integration business is worth what a buyer will pay for its multi-year statements of work and true service margin, not its total revenue, and that number drops sharply once pass-through model-API costs, contractor IP gaps and dependence on one vendor’s low-code platform are stripped out of the picture.
- What is an apparel DTC brand worth?An apparel DTC brand is worth what a buyer will pay for earnings that survive a full seasonal cycle without heavy markdowns, weighted down for return-rate volatility, single-factory dependence, and any inventory or intellectual property risk a buyer finds before the multiple is set.
- What is a B2B e-commerce store worth?A B2B e-commerce store is worth what a buyer will pay for earnings backed by a diversified account base and clean receivables, discounted for how much of that revenue sits with a small number of customers and how much of the store’s technical infrastructure would need to be rebuilt if a key integration failed to transfer.
- What is an appliance retailer worth?An appliance retailer’s value rests less on its showroom stock than on three attached and fragile things: manufacturer authorized-dealer status and territory protection, the service and repair department behind it, and whether warranties and financing plans sold to customers are the store’s own retained obligation or a third party’s.
- What is a retail bakery worth?A retail bakery’s value depends heavily on whether its recipes and production know-how are documented and assignable rather than held only in the head baker’s memory, how much revenue comes from wholesale accounts that can transfer, the remaining working life of its equipment, and whether the owner’s own pre-dawn labour has been honestly recast into the earnings a buyer is paying for.
- What is an architecture practice worth?An architecture practice is priced mainly on the strength and spread of its project pipeline and on whether licensed architects beyond the founder can keep stamping and delivering that pipeline, so two firms with similar billings this year can be worth very different amounts once a buyer looks at what happens after the founder steps back.
- What is a bookkeeping firm worth?A bookkeeping firm is typically valued off its recurring monthly or quarterly fee base rather than any single year of revenue, with the multiple set largely by how documented the client relationships are and how concentrated the client list is, since it is other bookkeeping and accounting firms, not outside investors, who mostly set the price for these books of business.
- What is an AI consulting practice worth?An AI consulting practice is worth what its repeat, named-client engagements and firm-owned methodology can keep earning without the founder personally delivering every project, and a practice built that way prices well above one running on one-off statements of work and a single rainmaker at similar revenue.
- What is an AI agent platform worth?An AI agent platform is worth what its guardrail, permissioning and audit-log infrastructure lets an enterprise customer actually trust with autonomous action, verified by task-completion data against real customer workflows rather than a vendor benchmark, and a platform that is mostly a thin layer over one foundation model’s tool-calling feature prices well below one with a genuinely defensible orchestration layer.
- What is an AI content generation tool worth?An AI content generation tool is priced mainly on the recurring subscription or credit revenue it actually retains from creative and marketing customers, discounted hard for undocumented training-data provenance, unclear output-rights terms and dependence on a single foundation-model API — not on a flat industry multiple applied to top-line revenue.
- What is a data-labelling and annotation business worth?A data-labelling and annotation business is valued mainly on multi-year master service agreements with named AI-lab or enterprise clients and documented quality-control processes a buyer can actually audit, discounted hard for spot-project revenue, unsigned confidentiality terms and a workforce classified as contractors in ways that may not hold up under employment-status scrutiny.
- What is an AI infrastructure and GPU services business worth?An AI infrastructure and GPU services business is worth what its contracted compute revenue and owned hardware can defensibly earn once hardware age, financing obligations and customer commitment levels are priced in — a reserved-capacity contract on owned equipment is worth a very different multiple than month-to-month resale of leased capacity, even at similar current revenue.
- What is an AI recruiting technology business worth?An AI recruiting technology business is worth what its recurring, retained per-seat or per-hire revenue can defensibly earn once the legal risk sitting inside its screening model is priced in — a business with documented bias testing and real applicant-tracking-system integrations is worth a meaningfully higher multiple of similar revenue than an unvalidated wrapper around a general-purpose AI model.
- What is an AI sales and marketing automation business worth?An AI sales and marketing automation business is valued mainly on how much of its lead-scoring or personalization capability is genuinely proprietary rather than a thin call to a single foundation-model API, how predictable its seat- or usage-based revenue is, and how much per-lead inference cost and deliverability risk erode its real margin.
- What is an AI search and retrieval platform worth?An AI search and retrieval platform is valued mainly on whether its retrieval and ranking layer is genuinely differentiated or a thin interface over a default vector database, how well its accuracy holds up on a real customer knowledge base rather than a demo, and how the platform’s inference and embedding costs scale with both document volume and query volume.
- What is an AI training and enablement business worth?An AI training and enablement business is valued mainly on how much of its revenue comes from recurring corporate cohort contracts rather than one-off public workshops, how current its curriculum stays as the underlying AI tools change, and whether delivery depends on one founder or a wider instructor bench.
- What is an applied-AI product studio worth?An applied-AI product studio is valued on how much of its work is genuinely retained product ownership — shipped products still earning revenue, documented equity or licensing positions, reusable internal tooling — versus work-for-hire delivery that leaves no asset behind once the invoice is paid.
- What is a computer-vision business worth?A computer-vision business is worth what a buyer will pay for its proprietary labelled data, its deployed hardware relationships and its verified field accuracy — not for the underlying vision-model technology itself, which is rarely unique and often licensed rather than owned outright.
- What is a conversational AI platform worth?A conversational AI platform is worth what a buyer will pay for its multi-tenant architecture, its verifiable deflection and resolution metrics, and its recurring seat- or conversation-based revenue — not for access to whatever foundation model sits underneath it, which the platform typically doesn’t own and could lose access to.
- What Is an MLOps Tooling Company Worth?An MLOps tooling company is priced on the durability of its recurring platform revenue and how defensible its position is against the cloud hyperscalers’ own native offerings, not on a generic software multiple pulled from trailing revenue alone.
- What Is a Model Fine-Tuning Services Business Worth?A model fine-tuning services business is priced mainly on whether its customer relationships are repeat and ongoing or purely project-based, and on how cleanly its contracts establish who actually owns the fine-tuned model weights once an engagement ends.
- What Is a Speech and Transcription Business Worth?A speech and transcription business is valued on the durability of its enterprise contracts, the defensibility of its acoustic models against generic transcription tools, and the documented consent behind every voice recording it holds — not on revenue size or headline accuracy claims alone.
- What Is a Synthetic Data Business Worth?A synthetic data business is valued on how independently verifiable its fidelity and utility metrics are, how clean the licensing chain is behind any real data used to build its generation models, and how much revenue is recurring platform access rather than one-off delivery.
- What is a vertical AI SaaS business worth?A vertical AI SaaS business is worth what its embedded workflow integration, recurring subscription revenue and domain-specific data can defensibly retain — a product that is really a thin interface over someone else’s foundation model prices well below one built on proprietary data and deep integration into the profession it serves, even at similar revenue.
- What is an auto body and collision repair shop worth?An auto body and collision repair shop is worth what its insurer direct-repair relationships, OEM certification level and in-house ADAS calibration capability can defensibly retain after a change of ownership — since a shop’s real asset is the referral relationship, not just the equipment on the floor.
- What is an audiology clinic worth?An audiology clinic is generally valued on normalized earnings blended from hearing-aid device sales and diagnostic testing fees, weighted by how much of that revenue depends on the owner’s own clinical time, how favourable and transferable the manufacturer purchasing terms are, and whether the recall list of existing hearing-aid clients is genuinely active rather than merely on file.
- What is a chiropractic clinic worth?A chiropractic clinic is generally valued on normalized earnings weighted by how much of the treatment volume comes from the owner personally versus an associate, how much of the patient base is on a recurring maintenance-care schedule likely to continue with a new practitioner, and how diversified the payer mix is across extended health, auto insurance and private pay.
- What is an auto detailing business worth?An auto detailing business’s value is driven mainly by how much of its revenue comes from recurring dealership and fleet reconditioning contracts rather than one-off retail visits, how dependent that revenue is on specific paint-correction or coating technicians, and how cleanly commercial and retail income are separated in the records — never a fixed multiple applied blindly to sales.
- What is an auto glass repair and replacement shop worth?An auto glass repair and replacement shop’s value is driven mainly by how secure its standing is inside insurer and national glass-claims networks, whether it can perform ADAS camera recalibration in-house rather than subletting that work out, and how current its mobile fleet and inventory are — never a fixed multiple applied blindly to revenue.
- What is an auto parts retailer worth?An auto parts retailer’s value is driven mainly by how much of its revenue comes from commercial repair-shop accounts rather than DIY walk-ins, the strength of its banner or co-op standing, and how clean its inventory is relative to book value — never a fixed multiple applied blindly to sales or revenue.
- What is an auto parts wholesale distributor worth?An auto parts wholesale distributor’s value is driven by the breadth of its account base across repair shops, dealers and retailers, whether its supplier distribution agreements — including any territory exclusivity — actually transfer to a new owner, and how well its warehouse, delivery fleet and inventory systems support consistent fill rates.
- What is an auto salvage and recycling yard worth?An auto salvage and recycling yard is worth what a buyer will pay for its clean environmental compliance history, its insurer and auction supply relationships, and a catalogued, sellable parts inventory — the vehicles sitting on the lot are close to the least important number in the calculation.
- What is a driving school worth?A driving school is worth what a buyer will pay for its provincial curriculum-provider approval standing, its roster of certified instructors and its insured dual-control fleet, discounted for how much of the enrolment depends on one person rather than the school itself.
- What is an EV charging and service centre worth?An EV charging and service centre is worth what a buyer will pay for its certified high-voltage technicians, its manufacturer warranty-program standing and its assignable charging or hosting agreements, discounted for equipment obsolescence risk and how much of the work depends on one technician.
- What is a fleet maintenance contractor worth?A fleet maintenance contractor is worth what a buyer will pay for its contract book — the term, renewal history and diversification of its fleet accounts — discounted for customer concentration, unassignable contracts and ageing mobile equipment, not a multiple applied to revenue alone.
- What is a franchised auto repair shop worth?A franchised auto repair shop is worth its normalized earnings after the royalty and marketing-fund deduction, adjusted up for a long remaining term with clear renewal rights and a protected territory, and down for an agreement nearing expiry, a franchisor approval clause, or near-term brand-mandated spending.
- What is a wholesale bakery or commissary kitchen worth?A wholesale bakery or commissary kitchen is worth what a buyer can keep earning from its wholesale accounts after closing, which depends far more on contracted account depth, documented recipes and spare oven capacity than on last year’s revenue line by itself.
- What is a building products manufacturer worth?A building products manufacturer is worth what a buyer can keep earning through the construction cycle after closing, which turns on how much builder and dealer volume is contracted rather than project-by-project, how current the product’s building-code certification is, and how much of the business rides on residential new-construction demand specifically.
- What is a banquet hall and event venue worth?A banquet hall or event venue is generally valued on normalized earnings from room rental, in-house catering and bar service, weighed against how deep and reliable its forward-booked calendar is, how much of that calendar’s deposits are a liability still owed in service, and how much of the booking pipeline rides on the owner’s personal vendor relationships rather than the venue itself.
- What is a bar and pub worth?A bar or pub is generally valued on normalized earnings from its beverage program, weighed against the capacity its liquor licence class actually permits, how much seasonal revenue a patio licence adds on top of the indoor footprint, and whether the licence carries any conditions or compliance history a regulator would weigh on a change of ownership.
- What is a bed and breakfast worth?A bed and breakfast is usually priced as a blend of the real property and a small income stream layered on top of it, so what it is worth depends heavily on whether the buyer is pricing a home with a business attached or a business that happens to include a home — two readings that can land on very different numbers for the identical building.
- What is a bowling centre worth?A bowling centre is generally valued on a combination of its recurring league revenue, the condition and remaining useful life of its pinsetter and lane equipment, and how much of its total worth is actually the large-format real estate underneath it — three components that a different buyer will weigh in a completely different order.
- What is a bike shop worth?A bike shop’s value rests less on its revenue total than on how much of that revenue comes from a durable service department, whether its manufacturer dealer agreements and territory protection are confirmed to transfer to a new owner, and how honestly owner labour and seasonal inventory timing have been factored into the earnings being priced.
- What is a bookstore worth?A bookstore’s value depends less on shelf inventory than on how much of that stock is owned outright rather than held on publisher sale-or-return terms, how the margin blend splits across new, used and non-book categories, and how much of its community identity is personal to the current owner.
- What is a brewery or brewpub worth?A brewery or brewpub is worth what a buyer will pay for its brewing capacity, its mix of high-margin taproom sales against lower-margin wholesale distribution, and how much of its retail and distribution reach actually survives a change of ownership.
- What is a café or coffee shop worth?A café or coffee shop is worth what a buyer will pay for its beverage margin and day-part traffic, discounted for aging espresso equipment, single-tenant location dependence and the gift card and loyalty liability the buyer takes on at closing.
- What is a building supply dealer worth?A building supply dealer is worth what a buyer will pay for its trade-account base and credit quality, its yard and delivery-fleet capacity, its supplier and mill relationships, and its mix of commodity versus specialty product — not simply a multiple of reported revenue, since two similar-looking yards can carry very different risk in each of those areas.
- What is a butcher shop worth?A butcher shop is worth what a buyer will pay for its skilled cutting staff and the odds they stay, its wholesale or restaurant accounts, its share of value-added products, and the condition of its cold-chain and processing equipment — not a simple multiple, since shrink and yield make normalized earnings harder to read than they first appear.
- What is a cabinetry and millwork shop worth?A cabinetry and millwork shop is worth what a buyer will pay for its normalized earnings once that buyer has priced how much of the project pipeline depends on the owner’s personal relationships with builders and designers, whether CNC equipment or manual methods drive its production margin, and how much open warranty and callback exposure sits unresolved at the time of sale.
- What is a chemical blending and formulation business worth?A chemical blending and formulation business is worth what a buyer will pay for its normalized earnings once that buyer has priced whether the business owns its formulations outright or merely toll-blends for others, whether its site and product registrations are secured and transferable, and how much environmental and customer-concentration risk sits underneath the numbers.
- What is a campground and RV park worth?A campground or RV park is priced on its pre-sold seasonal-site revenue, the condition of its water and septic infrastructure, and the value of its underlying land, discounted for a short Canadian operating season and any infrastructure nearing the end of its life.
- What is a catering company worth?A catering company is priced on the strength and reliability of its forward-booked event pipeline rather than its equipment, and that figure is discounted for how much of it depends on the owner-chef’s personal relationships and how the deposits already collected against future events are actually accounted for.
- What is a cannabis retail store worth?A cannabis retail store’s value rests mainly on the strength and durability of its retail authorization, its compliance record with the provincial regulator and its location relative to proximity and density rules — not on fixtures or the till, and not on any national formula, since the provincial retail model itself differs completely from one part of Canada to another.
- What is a clothing boutique worth?A clothing boutique’s value depends less on its trailing sales total than on how much of its inventory is actually current-season and sellable at full margin, how much of the vendor relationship and customer following is personal to the owner rather than to the store, and how honestly the markdown history has been reflected in the books.
- What is a convenience store worth?A convenience store’s value comes from recasting earnings for the owner’s own hours, weighing how much of its commission income from lottery, tobacco and bill-payment services is durable versus personal to the operator, and pricing the remaining lease term — not from trailing revenue alone.
- What is a dollar store worth?A dollar store is valued around the gap between its fixed shelf prices and its moving landed cost, weighted by whether banner or buying-group membership gives it better freight and volume pricing than an independent could get alone, and by how efficiently it turns over its high SKU count rather than by trailing revenue.
- What is a cosmetics DTC brand worth?A cosmetics DTC brand is worth what a buyer will pay for its recurring customer revenue and clean, compliant formulations, discounted for any notification, ingredient or labelling risk and for inventory nearing its shelf-life or period-after-opening date.
- What is a digital products business worth?A digital products business is worth what a buyer will pay for a catalogue of proven, cleanly owned products sold through a delivery platform the buyer can actually keep operating, discounted for any single-product concentration, unresolved contractor ownership claims or platform lock-in.
- What is a distillery worth?A distillery is worth what a buyer will pay for its still capacity and its barrel-aged spirit inventory, discounted for the federal excise duty owed on production and how much of its provincial listings and retail reach would actually survive a change of ownership.
- What is an escape room and entertainment venue worth?An escape room or entertainment venue is worth what a buyer will pay for how fully its booking slots are utilized across the week, how much of its room design is owned outright rather than licensed, and how much of its corporate booking pipeline would survive a change of owner.
- What is a dropshipping business worth?A dropshipping business is worth what a buyer will pay for a documented, transferable supplier relationship and a track record of reliable delivery, and that price drops sharply the moment either one is informal, undocumented, or dependent on an unusually cheap ad channel.
- What is a food and beverage DTC brand worth?A food and beverage DTC brand is worth what a buyer will pay for a currently licensed, reliably shipping product with genuine repeat-purchase demand, and that figure collapses fast the moment the federal safety licence, the co-packer relationship or the labelling is not fully in order.
- What is an online course business worth?An online course business is worth what a buyer will pay for enrolment and revenue that survive the founder leaving, and that figure drops sharply when the course’s audience, content or delivery depends on the founder personally staying visible.
- What is an outdoor and sporting DTC brand worth?An outdoor or sporting DTC brand is worth what a buyer will pay for demand that is not concentrated in a single season, a manufacturing relationship that survives a change of ownership, and any trademark or safety certification already in place — and that figure drops sharply wherever protective-equipment products lack current safety documentation.
- What is an electronics assembly manufacturer worth?An electronics assembly manufacturer is worth what a buyer will pay for its SMT line capacity, its new-product-introduction engineering relationships and the breadth of its OEM customer base — discounted for component obsolescence exposure and how much of the certified know-how walks out the door with the owner.
- What is a food and beverage processor worth?A food and beverage processor is worth what a buyer will pay for its licensed operating status, its ownership of recipes and formulations, and the durability of its retail or foodservice distribution relationships — often more than the processing equipment recorded on the balance sheet.
- What is an electronics retailer worth?An electronics retailer’s value rests less on what is sitting on the shelf than on how much of its earnings come from repair, trade-in and refurbishment work that does not depreciate the way new-unit inventory does, and on whether its authorized-dealer and service-authorization status will actually survive a change of owner.
- What is a flooring and tile showroom worth?A flooring and tile showroom’s value rests more on its installer network and the mix between builder trade accounts and retail sales than on the showroom itself, because most of what it sells is quoted against a project and delivered later through installation the store remains responsible for, not handed over the counter at the point of sale.
- What is an engineering firm worth?An engineering firm is valued mainly on the durability of its project pipeline and the depth of licensed engineers able to hold the professional seal beyond the founder, discounted for liability tail risk and founder dependence, so two firms with similar revenue can price very differently.
- What is an environmental consulting firm worth?An environmental consulting firm is valued mainly on how diversified its project triggers are — real estate diligence, development approvals and compliance monitoring rather than one referral channel — and discounted for referral concentration and the liability tail attached to past report sign-offs.
- What is a fertility clinic worth?A fertility clinic is worth what a buyer will pay for its cycle volume, its embryology lab capability and the reproductive endocrinologists who drive its reputation, discounted for how much of that reputation is personal to physicians who may not stay after closing.
- What is a home care agency worth?A home care agency is worth what a buyer will pay for its recurring client hours under contract, discounted heavily for caregiver turnover, dependence on any single funding source, and how much of its margin survives rising caregiver wage pressure.
- What is a financial planning practice worth?A financial planning practice is generally valued on how durable its assets under management or advisement have proven through a full market cycle, weighted heavily by how much of that revenue is fee-based rather than tied to commission or trailer income dependent on the seller’s own dealer relationship, and adjusted for how completely client files are documented rather than held only in the founder’s memory.
- What is a food truck worth?A food truck is worth what a buyer will pay for its vehicle and kitchen-build condition and its private-event and festival booking calendar, plus — cautiously — whatever transferable value survives in its municipal vending permit and social-media following, discounted heavily wherever any of those turn out to be personal to the seller rather than the business.
- What is a franchised QSR worth?A franchised QSR is worth what a buyer will pay for its unit economics net of the royalty and advertising-fund percentages owed to the franchisor, the term and renewal strength of the franchise agreement, and the territory protection standing behind it.
- What is a full-service restaurant worth?A full-service restaurant is worth what a buyer will pay for its seller’s discretionary earnings relative to seat count and covers achieved per turn, the margin its beverage program earns where a liquor licence is in good standing, and the condition of the lease and kitchen equipment behind both.
- What is a furniture manufacturer worth?A furniture manufacturer is worth what a buyer will pay for its dealer and retail channel relationships, its owned product designs and tooling, and its production capacity — rarely a simple multiple of revenue on its own.
- What is an industrial automation and controls integrator worth?An industrial automation and controls integrator is worth what a buyer will pay for its recurring service revenue, its named engineering talent and vendor certifications, and its panel-shop capability — not simply a multiple of project backlog.
- What is a furniture retailer worth?A furniture retailer’s worth turns on the quality of its special-order backlog, whether its supplier and manufacturer agreements actually transfer to a new owner, and how much of its sales depend on in-house delivery, assembly and financing capability rather than the showroom floor alone.
- What is a garden centre worth?A garden centre’s worth depends on how its earnings are read across several full growing seasons rather than one, the strength of its relationships with the growers and nurseries it buys finished plant stock from, and whether its land and greenhouse structures need to be valued separately from the retail business itself.
- What is a ghost / cloud kitchen worth?A ghost or cloud kitchen is valued on the order volume and rating it has built across each delivery-app channel and on how many virtual brands its kitchen footprint can run profitably, discounted wherever that revenue rides on a platform account or rating history that will not automatically survive a change of ownership.
- What is a golf course worth?A golf course is really two assets folded into one — an operating recreation business earning green fees, memberships and food and beverage revenue, and a large parcel of land — and what it is worth depends heavily on which of those two things a buyer believes they are actually pricing.
- What is a grocery store worth?A grocery store’s value comes from more than one multiple: banner or co-op standing, how much of the fresh-department mix survives a change of owner, recast family-labour earnings, and the age of its refrigeration and freezer plant all move the price independently of each other.
- What is a hardware store worth?A hardware store’s value depends on its co-op or banner standing, how much of its earnings a deep low-turn SKU assortment can actually support once slow stock is counted, and how much profit comes from service counters like key cutting, paint tinting or equipment rental.
- What is a denturist clinic worth?A denturist clinic is worth what a buyer will pay for its recurring adjustment, reline and repair revenue and its referral relationships, not for a single strong year of new-denture sales, and that figure is discounted whenever the clinic depends on one denturist with no coverage.
- What is a heavy truck and trailer repair shop worth?A heavy truck and trailer repair shop is worth what a buyer will pay for its normalized earnings once that buyer has priced in whether the commercial inspection authorization will survive the sale, how diversified the fleet customer base actually is, and whether the heavy-duty technician bench can outlast the owner.
- What is an independent auto repair shop worth?An independent auto repair shop is worth more when its customer base follows the shop’s name rather than one technician, when its equipment can already service ADAS-equipped vehicles, and when its scheduling and customer-communication systems run without the owner personally holding every relationship together.
- What is a home goods DTC brand worth?A home goods DTC brand is worth what a buyer will pay once the true cost of damage-in-transit and return shipping is stripped out of the reported margin, and that figure moves more on the manufacturing relationship and design-rights protection behind the product than on revenue alone.
- What is a kids and baby DTC brand worth?A kids and baby DTC brand is worth what a buyer will pay for documented, category-specific safety compliance, adequate product liability insurance and a clean recall history, because in this sub-sector those three things determine whether the earnings a seller reports are actually collectible after closing.
- What is a hotel worth?A hotel is worth what a buyer will pay for its RevPAR trend, the reservation and loyalty pull of its franchise brand, and the capital obligations — chiefly a franchisor’s property improvement plan — that come bundled with that brand.
- What is a marina worth?A marina is worth what a buyer will pay for its slip occupancy and ancillary fuel and repair revenue, and — more than either of those — for the remaining term and assignability of the water-lot lease the business almost always sits on rather than owns.
- What is an injection moulding company worth?An injection moulding company is worth what a buyer will pay for its press capacity and the stability of the production programs running on it, discounted for customer concentration, an aging press fleet, unclear mould ownership and unhedged resin cost exposure — never a single industry multiple applied to revenue.
- What is a machine shop or precision machining business worth?A machine shop or precision machining business is worth what a buyer will pay for its machine capacity, the breadth of its customer book and any quality certification held by the corporate entity, discounted heavily whenever programming and setup knowledge lives in one machinist’s head instead of documented setup sheets and CAM files.
- What is an investment advisory book worth?An investment advisory book’s value tracks the durability of its assets under management — how much sits in fee-based rather than commission revenue, how concentrated it is among a few large accounts, and how clean its compliance file is — far more than the raw AUM total by itself.
- What is an IT consulting firm / MSP worth?An IT consulting firm or MSP’s value tracks the proportion of revenue under recurring, defined-term managed-service contracts rather than one-off project or break-fix work, how standardized its tooling and delivery are across clients, and how little the business depends on any one technician, including the owner.
- What Is a Jewellery Store Worth?A jewellery store’s value rests on the inventory it genuinely owns rather than holds on consignment or memo, on the recast earnings from design, repair and appraisal services, and on the security and insurance costs that are unusually heavy for this retail category.
- What Is a Liquor and Beer Retailer Worth?A liquor and beer retailer’s value rests mainly on the retail authorization itself and how readily it can be reissued to a new owner in that specific province, since the retail model, wholesale supply and pricing rules all differ from one province to the next.
- What is a land surveying firm worth?A land surveying firm is valued less on trailing revenue than on how much of it survives a change in who signs the plans: the completeness of its archive of prior survey records, whether commissioned surveyors beyond the founder can sign, and how concentrated its referral base is in one or two municipal or developer clients.
- What is a law practice worth?A law practice is generally valued on normalized earnings adjusted for how much of the file mix is recurring or referral-driven work versus one-off litigation, how much of the client relationship sits with associates rather than the founding lawyer, and how much the price should be discounted for active litigation files, trust-account exposure or contingency work whose value is genuinely uncertain.
- What is a lead-generation website worth?A lead-generation website is worth what a buyer will pay for a documented relationship with more than one lead buyer and search rankings that do not depend on a single page, and that price falls sharply the moment either one turns out to be concentrated or informal.
- What is a membership site business worth?A membership site business is worth what a buyer will pay for genuinely durable retention — low involuntary churn from failed payments and low voluntary cancellation together — and that figure drops quickly once either number turns out to be worse than the headline churn rate suggests.
- What Is a Long-Term Care Home Worth?A long-term care home’s value comes primarily from its licensed bed count and provincial funding class rather than market pricing, with building condition, waitlist acuity, compliance history and the split between real estate and operating value all moving the number from there.
- What Is a Massage Therapy Clinic Worth?A massage therapy clinic’s value depends mainly on therapist utilization, recurring-client rebooking rate and extended-health direct-billing strength rather than its treatment rooms or equipment, with high therapist turnover and owner-personal-client dependency the biggest reasons two similar clinics price differently.
- What is a management consulting firm worth?A management consulting firm is generally valued on normalized earnings from its engagement backlog and repeat-client base, discounted heavily for how much of that work depends on the founder’s personal reputation rather than the firm’s people, tools and referral relationships.
- What is a meat processing business worth?A meat processing business is worth what a buyer will pay for its licensing tier, its cold-chain infrastructure and the durability of its retail, foodservice or export customer relationships — often more than the processing equipment itself.
- What is a metal fabrication shop worth?A metal fabrication shop is worth what a buyer will pay for its backlog quality, its press brake, laser and welding capacity relative to current bottlenecks, and its CWB certification standing — often more than a simple multiple of last year’s revenue suggests.
- What is a medical aesthetics clinic or med spa worth?A medical aesthetics clinic or med spa is worth what a buyer will pay for its recurring membership and package revenue, treatment-room utilization and equipment depth, discounted for how much of the client relationship rides on one provider’s personal brand rather than the business itself.
- What is a family practice or medical clinic worth?A family practice or medical clinic is worth what a buyer will pay for its facility, administrative infrastructure and ancillary services — not the attached patient panel or the physicians’ billing numbers, both of which are personal to the treating physicians and do not transfer on a sale.
- What is a medical equipment supplier worth?A medical equipment supplier is worth what a buyer will pay for its recurring rental and service revenue, its assignable manufacturer agreements, and the institutional accounts that keep equipment moving — not for the retail inventory sitting on the shelf.
- What is a medical imaging centre worth?A medical imaging centre is worth what a buyer will pay for its modality utilization, its referring-physician relationships, and — in provinces that cap facility licences — the licence itself, which can be the scarcest and most valuable thing in the sale.
- What is a medical laboratory worth?A medical laboratory is worth what a buyer will pay for its test volume, its physician requisition relationships and, in provinces that cap community lab licences, the licence itself — often more than the analyzers and equipment on the bench.
- What is a mental health counselling practice worth?A mental health or counselling practice is worth what a buyer will pay for its clinician capacity and referral pipeline, discounted for how easily a contractor clinician can leave and take their client caseload with them.
- What is a mobile mechanic service worth?A mobile mechanic service is worth what a buyer will pay for a booking and dispatch system tied to the business rather than one technician’s phone, a serviceable route with real density, and online reviews that belong to the business — not for the van and tools sitting in the driveway.
- What is a motorcycle dealership worth?A motorcycle dealership is worth what a buyer will pay for the remaining term and standing of its manufacturer line agreements, the share of revenue that does not depend on the riding season, and rider-community engagement that keeps customers coming back — not the showroom floor of current-model inventory, which the buyer is largely financing separately anyway.
- What is a mortgage brokerage worth?A mortgage brokerage’s value depends less on last year’s commission total than on how durable that income is — how much comes from renewals rather than one-off originations, how diversified its lender relationships are, and whether clients belong to the brokerage or to individual agents.
- What is a notary practice worth?A notary practice is worth very different amounts depending on the province: in Quebec, a notary’s recurring file base in conveyancing, wills and estate administration is valued like a small civil-law practice, while outside Quebec a standalone notary practice is usually too thin to value on its own and is worth more as part of a larger practice.
- What Is a Multi-Channel Online Retailer Worth?A multi-channel online retailer is priced mainly on how evenly its revenue spreads across its channels and how reliably its inventory and pricing stay reconciled between them, since a buyer is paying for that diversification as much as for the sales total itself.
- What Is a Niche Content Publisher Worth?A niche content publisher is priced mainly on how diversified its revenue is across monetization channels and how independent the editorial operation is from the founder personally, since a portfolio built on one ad network and one writer is worth far less than the same traffic spread across several revenue streams and a documented process.
- What is a new car dealership worth?A new car dealership is worth what a buyer will pay for its manufacturer franchise standing, its fixed-operations profit base and its floorplan lending relationship — not a multiple applied to new-vehicle sales, which typically carries the thinnest and most incentive-dependent margin in the business.
- What is a powersports dealership worth?A powersports dealership is worth what a buyer will pay for its manufacturer line agreements and how much off-season revenue from service, storage and winterization offsets a short and concentrated selling season — not a multiple applied to peak-season sales alone.
- What is an occupational therapy practice worth?An occupational therapy practice is priced mainly on its insurer and case-manager referral relationships and the payer mix behind them, because that referral flow — not the equipment in the treatment room — is what keeps new files arriving after a change of ownership.
- What is an optometry practice worth?An optometry practice is really two businesses priced together — a clinical exam practice valued like other regulated health practices, and a retail dispensary valued on inventory turn and margin — and the two rarely carry the same multiple.
- What is an orthodontic practice worth?An orthodontic practice is valued mainly on its collectible treatment-plan backlog and the referral relationships feeding new patient starts, discounted for referral concentration, sole-clinician dependence and hard-to-collect patient financing, so two similar-looking practices can price very differently.
- What is a packaging manufacturer worth?A packaging manufacturer is worth what a buyer will pay for its normalized earnings once that buyer has priced in whether the converting equipment on the floor matches current customer specifications, how durable the customer supply agreements behind it really are, and how exposed the business is to resin, paperboard or film cost swings its contracts do not already pass through.
- What is a plastics extrusion business worth?A plastics extrusion business is worth what a buyer will pay for its normalized earnings once that buyer has priced in the capacity, age and condition of the extrusion lines, how complete the die-tooling library is relative to the product catalogue being sold, how diversified the end markets served are, and how exposed the margin is to resin costs its contracts do not already pass through.
- What is a payroll services bureau worth?A payroll services bureau’s value rests on the share of clients under multi-year service agreements rather than informal arrangements, an unbroken CRA remittance and filing record, how standardized its payroll platform and processes are, and how much recurring revenue its add-on services generate.
- What is a public relations firm worth?A public relations firm’s value depends on whether its media relationships are institutional, documented and spread across several senior staff, or concentrated in one founder’s personal network, along with how much revenue sits under real retainer contracts and how defensible its specialty is.
- What is a pet products DTC brand worth?A pet products DTC brand is worth what a buyer will pay for a clean, documented split between ingestible and non-ingestible product lines, a co-packing relationship in good standing, and a repeat-purchase base that does not depend on marketplace rankings, and that figure narrows quickly wherever any one of those is undocumented.
- What is a print-on-demand business worth?A print-on-demand business is worth what a buyer will pay for a design library of proven, repeatable sellers spread across more than one production partner and more than one storefront, and that figure drops sharply the moment the catalogue leans on a single viral design, a single supplier or a single marketplace account.
- What is a physiotherapy clinic worth?A physiotherapy clinic is valued on normalized earnings drawn from how fully its treatment rooms are booked and how reliable its payer mix is, discounted wherever revenue depends on the owner’s own hands-on treatment or on billing relationships that will not automatically survive a change of ownership.
- What is a podiatry / chiropody clinic worth?A podiatry or chiropody clinic is valued largely on its recurring diabetic and geriatric foot-care client base, but the ceiling on that value is set by the treating clinician’s scope of practice in that specific province, which decides what the clinic is legally allowed to bill for at all.
- What is a printing and label manufacturer worth?A printing and label manufacturer is generally valued on normalized press-floor earnings, weighted by how much of that output comes from genuinely repeat-order customer relationships rather than one-off jobs, how differentiated its prepress and substrate capability is, and how exposed its customer base is to shifting its own print demand toward digital channels.
- What is a sheet metal shop worth?A sheet metal shop is generally valued on normalized earnings weighted by how automated its cutting, punching and bending equipment is relative to competitors, how its revenue splits between cyclical HVAC and construction ductwork work and steadier OEM contract-manufacturing volume, and whether standing supply agreements and material-yield practices are documented rather than assumed.
- What is a private-label brand worth?A private-label brand is worth what a buyer will pay for a documented, exclusive manufacturing relationship, brand-owned tooling and a registered trademark that stands apart from any single sales channel, and that value falls sharply the moment any one of those three is missing or informal.
- What is a Shopify DTC brand worth?A Shopify DTC brand is worth what a buyer will pay for owned-channel traffic, a documented app and theme stack, and a payment gateway with a clean chargeback history, and that value drops sharply once acquisition depends on paid social the founder personally manages.
- What is a property management firm worthA property management firm’s value comes primarily from the durability of its management-agreement book — how many years are left on contract, how diversified the client base is, and how much of the operation runs on documented systems rather than the owner personally, with trust-account discipline acting as a precondition rather than a value driver on its own.
- What is a recruiting firm worthA recruiting firm’s value depends heavily on how much of its revenue comes from repeat client mandates and retained search work rather than one-off contingency placements, and on whether the client relationships and candidate pipeline live in firm-level systems or inside individual recruiters’ personal networks.
- What is a quick lube and oil change centre worth?A quick lube and oil change centre is priced mainly on the traffic and visibility of its specific site, the upsell attach rate that carries most of its margin, and the remaining term on its franchise agreement — not on the shop’s reputation or the technicians inside it.
- What is an RV dealership worth?An RV dealership is worth what a buyer will pay for its manufacturer line agreements, its facility’s capacity for large-unit inventory and service, and its recurring service and parts revenue — not the peak-season sales number alone, which on its own overstates a business that may run thin through the off-season.
- What is a quick-service restaurant worth?An independent quick-service restaurant is worth what a buyer will pay for its proven transaction throughput at peak periods, its drive-thru or online-ordering capacity, and its ability to run on standardized systems without the founding owner present, discounted for single-channel delivery dependence and ageing menu-specific equipment.
- What is a resort worth?A resort is worth what a buyer will pay for its blended revenue across accommodation and every bundled amenity together — not rooms alone — weighted by its land base and expansion potential, how well shoulder-season programming offsets seasonality, and how fully its amenities are utilized relative to capacity.
- What is a retirement residence worth?A retirement residence is worth what a buyer will pay for its verified occupancy, its care-package revenue on top of base rent, and the durability of its licence standing with the provincial regulator — not for its unit count alone.
- What is a speech-language pathology practice worth?A speech-language pathology practice is worth what a buyer will pay for its caseload mix, its contracted school-board or early-intervention volume, and how much of its referral relationships survive the departure of the owner clinician — not for a single strong billing year.
- What is a salon worth?A salon is valued on how much of its revenue would keep arriving under a new owner once its staffing model — booth rental, commission or employee — and any concentration in one or two senior stylists are priced in, not on its chair count or square footage.
- What is a spa worth?A spa is valued on normalized earnings after the outstanding gift-card and prepaid-package liability is properly quantified and deducted, since a spa that sells packages and gift cards aggressively can show strong historical revenue while already owing a meaningful share of future treatment time to clients who have already paid.
- What is a sign manufacturer worth?A sign manufacturer is worth what a buyer will pay for its fabrication capability, its in-house electrical and installation capacity, and the durability of its multi-location account relationships — not simply a multiple of its current sales.
- What is a tool and die shop worth?A tool and die shop is worth what a buyer will pay for engineering and toolmaking talent beyond the owner, a proven track record with OEM customers, and how diversified its customer base is across industries — rarely its equipment alone.
- What is a tax preparation practice worthA tax preparation practice in Canada is worth what a buyer will pay for its returning client base — measured by how reliably clients come back each filing season — plus any off-season revenue that smooths a business built almost entirely around one short annual peak, since no professional licence, equipment or real estate typically underpins the price.
- What is a subscription box business worth?A subscription box business is worth what a buyer will pay for net subscriber growth that holds up past the first couple of billing cycles, after subtracting the deferred-revenue liability for boxes already paid for but not yet shipped, and any risk sitting inside the payment-processor relationship.
- What is a supplement and nutraceutical brand worth?A supplement and nutraceutical brand is worth what a buyer will pay for a product catalogue with a valid, current Natural Product Number behind every SKU actually being sold, and that figure drops sharply for any product missing one or resting on a licence application still pending with Health Canada.
- What is a tire sales and service centre worth?A tire sales and service centre’s value rests mainly on how much of its storage-programme revenue is durable profit rather than a cost offset, whether its manufacturer rebate and volume-pricing tiers survive a change of owner, and how current its alignment and TPMS equipment is — never a flat multiple applied to sales.
- What is a towing and vehicle recovery company worth?A towing and vehicle recovery company’s value rests mainly on whether its rotation-list and dispatch standing is genuinely tied to the business rather than to the owner personally, how well its truck fleet matches the contract mix it actually serves, and the condition of its storage yard — never a flat multiple applied to call volume.
- What is a training and e-learning provider worth?A training and e-learning provider is worth more when its revenue comes from courseware the firm owns outright and from renewing corporate contracts, and less when accreditation, client relationships and delivery all rest on one facilitator’s personal brand.
- What is a translation services firm worth?A translation services firm is worth more when certified work for legal, immigration or government clients recurs through institutional contracts and a diversified certified-translator roster, and less when it depends on one or two freelancers and one-off certified-document requests.
- What is a transmission and drivetrain specialist worth?A transmission and drivetrain specialist is worth its normalized owner earnings after adjusting for open rebuild-warranty exposure, the true condition of its core inventory, and how much of its work depends on one technician rather than a documented referral network.
- What is a used car dealership worth?A used car dealership is worth its normalized owner earnings after adjusting for how fast inventory actually turns, how much of its marketplace visibility and review standing genuinely transfers to a new owner, and how collectable any buy-here-pay-here receivables really are.
- What is a vehicle inspection station worth?A vehicle inspection station is worth what a buyer will pay for calibrated equipment, more than one certified inspector, a clean compliance history and documented referral volume, not for the station licence itself, which does not transfer with a sale.
- What is a content site with ad revenue worth?A content site with ad revenue is worth what a buyer will pay for traffic spread across many search queries, a premium ad-network relationship with a proven revenue rate, and a track record of surviving prior search-algorithm updates, not for a single strong month, which can vanish overnight.
- What is a walk-in clinic worth?A walk-in clinic is worth what a buyer will pay for its location and foot traffic, its physician coverage hours and how reliably they are staffed, and its patient throughput per shift — not for a client relationship, because a walk-in clinic keeps no rostered patient panel to sell.
- What is a welding shop worth?A welding shop is worth what a buyer will pay for its bench of CWB-certified welders, its mix of shop and field-service work, and its recurring maintenance contracts — not a simple multiple of revenue on a business that may rest entirely on one person’s certification.
- What is a windows and doors manufacturer worth?A windows and doors manufacturer is worth what a buyer will pay for its energy-performance certification standing, its builder and dealer relationships, and its production capacity — discounted hard for whatever warranty liability sits unreserved against products already installed.
- What is a winery worth?A winery is worth what a buyer will pay for secure grape supply, tasting-room and wine-club margin against wholesale, production capacity, and whatever standing it holds under a provincial appellation program, weighed against how much of that survives a change of ownership.
- What is a yoga or pilates studio worth?A yoga or pilates studio is worth what a buyer will pay for its active class-pass base and instructor roster depth, discounted for how much of the revenue rides on one or two popular teachers rather than the business itself.
- How to value a business in CanadaBusiness valuation in Canada means normalizing a company’s financial results and applying an earnings-based, asset-based or market-based method to them, and how rigorously that has to be done — a rule of thumb, a broker’s opinion, or a report from a Chartered Business Valuator — depends on whether the number is for a sale, tax planning, a dispute or financing.
- SDE vs EBITDA: which one applies to your businessSeller discretionary earnings applies to a business run day-to-day by its owner, since it adds the owner’s full compensation back to profit, while EBITDA applies once a business is professionally managed and pays market-rate compensation for the work the owner still does, because EBITDA only adds back interest, tax, depreciation and amortization.
- How buyers verify the earnings you reportBuyers verify reported earnings by reconciling your financial statements to your filed tax returns and sales-tax filings, cross-checking bank deposits and supplier records against reported revenue, requiring documentation for every add-back, and, on larger deals, commissioning an independent quality-of-earnings review before closing.
- What drives a higher multiple on a business saleA higher multiple reflects lower perceived risk to future earnings: businesses that run without heavy owner involvement, hold a diversified customer base, show consistent or growing earnings, and operate on documented systems consistently price at a stronger multiple than similar-revenue businesses that depend entirely on one person.
- How to read a business valuation reportA business valuation report should be read for three things above the final number: which method was used and why, what assumptions and normalizations were made to the financial statements, and whether the reasoning would hold up if a skeptical outsider — a buyer, a lender or the CRA — read it line by line.
- Valuing a business that owns its premisesA business that owns its own real estate is valued by separating the two components — the operating business, valued off normalized earnings after adjusting for a fair market rent, and the real estate itself, valued by a property appraisal — because combining them into one multiple misprices both.
- What is a trades business worth?A trades business is generally valued as a multiple of seller’s discretionary earnings, adjusted for how dependent it is on the owner, how much revenue is contracted or recurring, and the condition of its vehicles, equipment and licensing.
- What is a restaurant worth?A restaurant is generally valued as a multiple of seller’s discretionary earnings, adjusted for the strength of the lease, whether the liquor and food licensing is transferable, kitchen equipment condition, and how dependent it is on the owner.
- What is a trucking business worth?A trucking business is generally valued on a multiple of its normalized earnings, usually seller’s discretionary earnings for an owner-operated carrier, adjusted for fleet condition, freight-contract quality and safety record. Two carriers with similar revenue can be worth very different amounts once those adjustments are made.
- What is a manufacturing business worth?A manufacturing business is generally valued on a multiple of its normalized earnings, with the equipment, inventory and work-in-progress checked separately to confirm the balance sheet actually supports that earnings figure. A plant with strong reported profit but aging, undermaintained equipment is typically worth less than the income statement alone suggests.
Expert answers
- How do I know what my business is worth?Business value generally starts from normalized earnings — SDE for owner-operated businesses, EBITDA for larger ones — multiplied by a sector-appropriate figure. What moves that multiple is risk: how much of the business depends on the current owner, how concentrated the customers are, and how predictable next year’s revenue is.
- How does remaining term affect a franchise resale price?The less time remains on a franchise agreement, and the less certain renewal is, the less a buyer can justify paying — the purchase buys a stream of future income that stops when the agreement ends. A location with years left and a clear, affordable renewal right supports a materially higher price than an identical location with a short term and a renewal the franchisor can decline or reprice.
- Is a franchise worth more than an independent business?Neither is inherently worth more. A franchise typically produces lower discretionary earnings, because royalties come off the top every year, but buyers and lenders sometimes accept a narrower risk premium for a proven system and a recognizable brand. Which effect dominates depends on the specific system and location, and how much of its success comes from the brand rather than the operator.
- How is a multi-unit franchise business managed and valued?A multi-unit franchise business is generally managed through a layer of location or area managers, since one owner cannot personally run several locations’ operations. Buyers and lenders tend to value that structure differently than a single owner-operated location, because a business already running on documented systems and delegated management is less dependent on any one person, including its owner.
- How much is my HVAC business worth?An HVAC business is generally valued as a multiple of seller’s discretionary earnings, but the size of that multiple depends heavily on how much revenue comes from signed maintenance contracts rather than one-off installs, and on how portable the gas and refrigeration licensing actually is.
- How much is my restaurant worth?A restaurant is generally valued as a multiple of seller’s discretionary earnings, the same starting point used across small business valuation, but because restaurant margins run thin, small swings in food cost and labour cost move that earnings figure far more than an equivalent swing in revenue does.
- How much is my convenience store worth?A convenience store is generally valued off seller’s discretionary earnings like any other retail business, but the mix between low-margin, high-volume categories such as fuel, lottery and tobacco and higher-margin merchandise, along with whether the store operates under a recognized banner, moves the multiple more than in most other retail formats.
- How is retail inventory valued at closing?Retail inventory at closing is first sorted into what the store actually owns outright versus stock held on consignment or supplier-owned display units that are not the seller’s to sell, and only the owned stock is then counted and priced, typically at cost, with the total settled as an adjustment to the purchase price rather than folded into it.
- How much is my dental practice worth?A dental practice is generally valued on normalized earnings adjusted for how much of the practice’s production comes from the owner personally versus associates and the hygiene department, and increasingly on which kind of buyer is looking, since a solo dentist buyer and a consolidating group weigh the same numbers differently.
- What multiple does a SaaS business sell for?A SaaS business is commonly discussed in terms of a multiple applied to annual recurring revenue rather than earnings, and where that multiple lands within any illustrative range moves heavily with growth rate, net revenue retention and gross margin — not with revenue size alone.
- How is a fleet valued in a trucking sale?A fleet is generally valued at its appraised fair market value from an independent equipment appraiser, not its depreciated book value or its original purchase price, and where units are still financed or leased, only the equity above the outstanding payout actually adds to the purchase price.
- How much is an auto repair shop worth?An auto repair shop is generally valued as a multiple of seller’s discretionary earnings like most small businesses, but its labour-to-parts revenue mix, the site’s environmental history, and whether it operates under a franchise banner or independently each move that multiple in ways that are specific to this industry.
- What is the difference between price and enterprise value?The headline price a buyer and seller agree is usually built from enterprise value, what the operating business itself is worth independent of how it happens to be financed, and then adjusted for the target’s actual debt, cash and working capital position at closing to arrive at the equity value, which is the number that determines what actually changes hands.
- What is the difference between SDE and EBITDA?SDE — seller’s discretionary earnings — adds the owner’s salary and personal benefits back into profit, on the logic that a new owner-operator will take that money themselves. EBITDA leaves a market-rate wage for the owner’s role as a cost. On an owner-operated business the two can differ by six figures, which is why the measure being quoted matters as much as the number.
- How does the industry intelligence panel work?Every listing on Deavo carries an industry intelligence panel showing typical margins, growth trends and a conservative estimated value range, built from aggregated public economic data for that industry, not from the specific business’s own financials. It exists to give a buyer general context about the sector, and it is never an appraisal or a claim about the individual business.
- What is the estimated value range on a listing?The estimated value range shown on a Deavo listing is a broad, conservative spread built from public benchmark data for that industry, meant to give a buyer or seller a general sense of scale. It is not an appraisal, a valuation, or any opinion about what that specific business is actually worth, and it should never be treated as one.
- Should I keep the real estate when I sell the business?Keeping the real estate and leasing it to the buyer gives you ongoing rental income and keeps a valuable asset, but ties you to the buyer as a landlord and can make the deal harder to finance; selling the property with the business simplifies the transaction and often produces a cleaner exit, and which suits you depends on your income needs and how much ongoing involvement you want.
- What if the owner basically is the business?Buying a business where the owner personally holds every key relationship means you are really buying a transition project, not a turnkey operation, and the deal needs to be structured around that reality — commonly through a defined training and handover period, an earn-out or holdback tied to post-closing performance, and a genuine non-compete. Price alone does not solve this kind of risk.
- What if the business has been losing customers?A customer count that has been declining does not automatically mean the earnings are unreliable, but it changes how those earnings should be read — separate the cause into something structural, competitive, or specific to the current owner, because each points to a different effect on value and a different question worth asking before you rely on any multiple.
- How do I value a business with messy books?Disorganized financial records make a business harder to value with confidence, not impossible to value at all — start by reconstructing a reliable revenue and expense picture from independent sources like bank statements and tax filings, then treat the resulting uncertainty as a genuine discount rather than pretending the numbers are more precise than the records actually support.
- What multiple do small businesses sell for in Canada?Small Canadian businesses are typically priced as a multiple of seller’s discretionary earnings, and that multiple moves with risk, size, growth, and owner dependence rather than following one fixed industry rule of thumb.
- Why is my business worth less than I expected?A gap between what an owner expects and what buyers or lenders will actually pay almost always traces back to owner dependence, messy or unverifiable financials, customer concentration, or a declining earnings trend, not to the buyer undervaluing the business.
- Do I need a professional business valuation?A formal valuation is worth the cost whenever a number will be relied on for a sale price, financing, litigation, a shareholder buyout, or an estate, situations where a defensible, documented opinion matters more than a quick estimate.
- What is my business worth without me in it?A business that cannot run without its owner is worth meaningfully less than an identical business with a manager or team in place, because a buyer is effectively pricing the risk that revenue, customers, or operations falter the moment ownership changes hands.
- How is inventory valued in a business sale?Inventory is normally valued separately from goodwill in a business sale, priced at a defined standard such as cost or net realizable value, counted at or near closing, and settled through a purchase price adjustment rather than folded into the multiple applied to earnings.
- How do I value a service business?A service business is valued almost entirely on the durability of its earnings and client relationships rather than on hard assets, so the multiple applied to its adjusted earnings depends heavily on how much of the work is contracted or recurring versus tied to the owner personally.
- How do I value a business that owns its real estate?Real estate owned by a business is normally valued separately from the operating business itself, using a real property appraisal rather than an earnings multiple, and the two values are then added or structured together depending on whether the buyer wants the building as part of the deal.
Comparisons
- Accountant vs business valuatorAn accountant prepares and reviews a business’s financial statements and tax filings and can offer an informal read on value, while a Chartered Business Valuator is credentialed specifically to produce a defensible, evidence-based valuation report using recognized methodology — a materially different scope and level of rigour.
- Business valuation vs real estate appraisalA business valuation values the operating business — its earnings power, customer relationships and goodwill — as a going concern, typically prepared by a credentialed business valuator, while a real estate appraisal values only the land and building, prepared by an accredited property appraiser using entirely different methods and evidence.
- Working capital peg vs cash-free debt-freeA cash-free, debt-free structure is the market convention that the seller keeps the cash on the balance sheet and clears the debt before closing, while a working capital peg is a separately negotiated target for the operating assets — receivables, inventory and payables — that has to remain in the business, and the first does not automatically protect a buyer against the second being stripped down before closing.
- SDE vs EBITDASeller’s discretionary earnings adds back the owner’s full compensation on the assumption that a new owner-operator will run the business personally, while EBITDA assumes the business already pays market-rate management and adds back only interest, tax, depreciation and amortization. The two measures describe different sizes of business and are not interchangeable without adjustment.
- Leasing vs owning your premises, when you sellIf you lease your premises, only the business itself is for sale and the lease has to be assigned or renewed for the buyer to take over, while if you own the real estate, you can bundle the property into the sale, sell it separately, or lease it back to the buyer — each option changes the price, the financing and who the buyer has to satisfy to close.
- A multiple-based estimate vs a formal appraisalA multiple-based estimate applies a general industry range to a business’s earnings and can be produced quickly and at low cost, while a formal appraisal is a credentialed, evidence-based report built specifically for that business — the two serve different purposes, and a quick multiple is not a substitute for an appraisal when real money, tax or a dispute depends on the number.
Definitions
- Seller’s marketA seller’s market exists when demand from qualified buyers exceeds the supply of good-quality businesses for sale, giving sellers more leverage — stronger prices, fewer contingencies, and often several buyers competing for the same opportunity. A buyer’s market is the reverse: more listings than qualified demand, favouring buyer leverage instead.
- Associate buy-inAn associate buy-in is when a professional already working in a practice — a dentist, doctor, veterinarian or lawyer, for example — purchases an equity stake in it rather than the practice being sold outright to an outside buyer. The price is usually set by a formula tied to collections or earnings and often paid in over time.
- Work in progress (WIP)Work in progress, or WIP, is the value of services or products a business has started but not yet billed to the client at the time of a sale. Because it sits between completed inventory and recognized revenue, buyers and sellers usually negotiate separately how WIP is valued and who is entitled to collect on it after closing.
- Supply management quotaSupply management quota is the production right — most commonly for dairy, poultry or eggs — that lets a Canadian farm produce and sell a regulated volume under the national supply management system. Quota is administered and traded through provincial marketing boards, generally carries its own transfer rules and value, and often makes up a large share of a farm business’s worth.
- Equipment appraisalAn equipment appraisal is an independent professional’s estimate of what a business’s machinery and equipment is actually worth, typically expressed as fair market value and orderly liquidation value. Buyers, sellers and lenders use it to support purchase price allocation, financing decisions and insurance coverage rather than relying on the seller’s book value or a rough estimate.
- SeasonalitySeasonality is the predictable rise and fall in a business’s revenue, cash flow or staffing needs tied to the time of year — landscaping in summer, retail in December, tourism in peak months. A buyer needs numbers across a full cycle, not a snapshot, or a strong season gets mistaken for the business’s normal run rate.
- Bad debtBad debt is money a customer owes that the business concludes it will never collect, and either writes off or sets aside a reserve for. How consistently a seller has recognized bad debt over time — rather than leaving stale receivables sitting on the books uncollected and unwritten-off — is a direct test of how reliable the rest of the financial statements are.
- Capital expenditure (capex)Capital expenditure, or capex, is money spent on assets expected to provide value for more than a year — equipment, vehicles, leasehold improvements, a building — as opposed to day-to-day operating costs. Buyers split it further into maintenance capex, which just keeps the business running as-is, and growth capex, which expands it.
- Leasehold improvementsLeasehold improvements are permanent alterations made to leased premises — a commercial kitchen, a build-out, flooring, electrical or plumbing work. They are frequently a large part of what a buyer is paying for, and under most leases they become the landlord’s property at the end of the term.
- Revenue multipleA revenue multiple estimates a business’s value by multiplying its annual revenue by a factor drawn from comparable deals, rather than multiplying a profit measure like EBITDA or SDE. It suits fast-growing or thin-margin businesses — software, subscription, or e-commerce — where revenue is a more stable signal than current profit, but it ignores cost structure entirely.
- Discounted cash flow (DCF)Discounted cash flow (DCF) is a valuation method that projects a business’s future free cash flows over several years, then discounts each year’s projection back to today’s dollars using a rate that reflects risk and the time value of money. The result is a present value built entirely on assumptions about future performance.
- Asset-based valuationAsset-based valuation values a business as the sum of its individual assets — equipment, inventory, receivables, real estate, and intangibles — minus its liabilities, rather than as a multiple of earnings. It’s the standard reference point for asset-heavy or capital-intensive businesses and for companies with weak or inconsistent profitability.
- Normalization (normalized earnings)Normalization is the process of adjusting a business’s reported financial statements to remove items that don’t reflect how the business will actually perform going forward — one-time events, the owner’s personal expenses, or above- or below-market compensation. The result is normalized, or adjusted, earnings that buyers can compare across businesses on a like-for-like basis.
- Comparable transactionsComparable transactions — often called ’comps’ — are recent sales of similar businesses, used as a reference point when pricing a business for sale. Analysts look at deals in the same industry, of similar size, and in a similar geography, then compare the multiples those deals sold at to gauge where a current listing might land.
- Rule-of-thumb valuationA rule-of-thumb valuation applies a simple, widely used formula for a given industry — commonly a multiple of annual revenue, SDE, or a per-unit metric like price per seat or price per customer — to arrive at a quick, rough estimate of value. It’s a fast starting point for a conversation, not a substitute for a full valuation.
- Enterprise valueEnterprise value is the value of a business’s core operations, independent of how that business happens to be financed. It represents what it would cost to acquire the whole operating entity — commonly calculated as equity value plus debt, minus cash — and is the figure most often used when comparing businesses or applying an earnings multiple.
- Equity valueEquity value is the value of a business’s ownership stake — what shareholders actually own after debt is paid off. It’s calculated by starting from enterprise value, subtracting outstanding debt, and adding back cash on the balance sheet, which is why two businesses with the same operations can have very different equity values.
- Net working capitalNet working capital is a business’s current assets — cash, receivables, inventory — minus its current liabilities, such as payables and short-term debt. It measures the short-term operating cushion a business needs to keep running: paying suppliers, covering payroll, and carrying inventory or unpaid customer invoices before that cash comes back in.
- EBITDA marginEBITDA margin is EBITDA divided by revenue, expressed as a percentage. It shows how much of every dollar of sales converts into operating profit before financing costs, taxes, depreciation, and amortization are taken into account, which makes it a quick way to compare operating efficiency across businesses of very different sizes.
- Gross marginGross margin is revenue minus the direct cost of goods or services sold, expressed as a percentage of revenue. It measures how much a business keeps from each sale before covering overhead like rent, marketing, and administrative salaries, and it’s usually the first place a buyer looks to judge the health of the core pricing model.
- Recurring revenueRecurring revenue is income a business can reasonably expect to receive again from existing customers, without needing to win a brand-new sale each time — subscriptions, maintenance contracts, retainers, or repeat service agreements are common examples. Buyers generally value recurring revenue more highly than one-off sales because it’s more predictable.
- Customer churnCustomer churn is the rate at which existing customers stop doing business with a company over a given period — cancelling a subscription, not renewing a contract, or simply not coming back. It’s usually expressed as a percentage of customers, or of revenue, lost per month or per year, and low churn generally signals durable revenue.
- ARR and MRRARR (annual recurring revenue) and MRR (monthly recurring revenue) measure the predictable, subscription-style revenue a business can count on over the next year or month, based on active subscriptions and contracts at a point in time. They exclude one-time sales, and MRR is simply ARR divided by twelve, or vice versa.
- Revenue backlogRevenue backlog is the dollar value of confirmed orders or signed contracts that a business has not yet delivered or billed — work that’s committed but still ahead of it. It’s common in project-based businesses like construction, manufacturing, and professional services, where revenue is recognized only as the work is actually completed.
- Book of businessA book of business is the complete set of client relationships, accounts, and recurring engagements a company or individual professional has built up over time. In service industries — insurance brokerages, financial advisory, accounting, and similar fields — the book of business is often the single most valuable asset changing hands in a sale.
- Valuation gapA valuation gap is the difference between the price a seller expects for their business and the price buyers in the market are actually willing to pay. It’s one of the most common reasons a listing sits unsold, and it usually narrows only once one or both sides adjust their expectations based on real market feedback.
- Quality of earnings (QoE)Quality of earnings, or QoE, is an independent financial review that tests how accurate and sustainable a business’s reported earnings actually are, beyond what the financial statements show on their face. It checks whether reported profit is real, recurring, and properly supported — a step buyers commonly take before finalizing a deal, usually after signing a letter of intent.
- Seller’s discretionary earnings (SDE)Seller’s discretionary earnings (SDE) is the total annual cash benefit a single owner-operator receives from a business, before financing and before their own compensation. It starts at net profit and adds back the owner’s salary, personal and one-time expenses, interest, depreciation and amortization.
- EBITDAEBITDA is earnings before interest, taxes, depreciation and amortization — a measure of operating profit that strips out financing and accounting choices so two businesses can be compared directly. Unlike SDE, it does not add back an owner’s salary, because it assumes the business pays a market wage for management.
- Add-backsAdd-backs are expenses added back to a business’s reported profit because they are personal, one-time, or specific to the current owner and will not continue after the sale. They are how reported net profit becomes SDE or adjusted EBITDA, and they are the single most contested part of a valuation.
- Asking multipleAn asking multiple is the asking price expressed as a multiple of annual earnings — usually SDE for owner-operated businesses and EBITDA for larger ones. A business listed at $900,000 with $300,000 in SDE carries an asking multiple of 3.0×.
- Owner dependenceOwner dependence is the degree to which a business’s revenue, relationships or day-to-day operation rely on the current owner personally. The more a business depends on one person, the less of it actually transfers to a buyer — which is why heavily owner-dependent businesses sell at lower multiples, and sometimes do not sell at all.
- Customer concentrationCustomer concentration is the share of revenue that comes from a small number of customers. It matters because losing one account can erase a disproportionate share of earnings, so buyers and lenders discount concentrated revenue even when the business is profitable and growing.
- GoodwillGoodwill is the portion of a purchase price that exceeds the value of a business’s identifiable assets — its reputation, customer relationships, brand, trained staff and earning capacity. In an asset sale it is a separate line in the purchase price allocation, and it has its own tax treatment.
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