Construction Business Valuation Benchmarks

Business owners, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating businesses in the construction industry relative to industry standards.

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Highlights of Construction Businesses Sold on BizBuySell

Building and construction businesses listed and sold on BizBuySell are consistently profitable, and comprised primarily of small, locally owned businesses engaging in a wide variety of services within the construction industry. The majority of businesses offer services ranging from general construction to specialties such as plumbing, flooring, roofing, electrical, painting and finishing, heavy and civil construction, project management, and more. A smaller set of businesses engage in the manufacture and/or distribution of construction related products.

Construction Business Transaction Trends

Median sale prices of businesses in the building and construction space have shown a consistent, moderate increase with 19% growth in median sales price and 28% growth in asking price in the five-year period from 2021 to 2025. This trend shows construction businesses remain in demand, owners understand their value, and sellers continue to meet reasonable prices to close deals.

Construction Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of revenue and earnings. They represent the sales price of a business relative to its revenue or earnings, and given enough individual business sales data, they represent what the market is willing to pay for a business given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors such as interest rates, inflation, consumer spending, and overall economic growth. Valuation multiples across the broader building and construction space have remained remarkably consistent, with only modest fluctuations through the Covid-19 pandemic and ensuing economic volatility. While interest rates have put pressure on business valuations in nearly every other sector, building and construction valuations defy the trend, demonstrating how these businesses remain in demand and relevant, despite broader economic factors.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - business valuations tend to hinge on the earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its top line revenue potential.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of building and construction businesses for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are always higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners’ common tendency to overvalue their own businesses.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context. Local business sale comps by sales class suitable for pricing and negotiations are available in BizBuySell's Business Valuation Report.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high revenue, high value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Businesses with lower revenue and thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of building and construction businesses are worth between 1.81 and 3.13 times their annual seller discretionary earnings, with 25% of exceptional, larger businesses trading above this range, and 25% of the smaller, less desirable businesses trading below.

Financial Benchmarks

To determine how a business compares in terms of sales volume and financial performance relative to industry peers, it’s necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business’s financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated basic financials of construction businesses sold to generate ranges useful for comparing a construction business to the broader industry.

Construction Business Revenue and Earnings Trends

Financial performance of construction businesses sold over the last five years has grown moderately but consistently, given the volatility in the economy. Median revenue increased 6% from 2021 through 2025 while median owner earnings increased 15%. Construction volume appears to have slowed in the most recent years (-2% in 2024 and -7% in 2025), but business owners are managing to improve profit margins at the same time, leading to continued earnings increases.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to other construction businesses traded on the business for sale market. Below you will find discretionary earnings ranges for businesses sold over the past five years, as well as recent construction business for sale listings.

Revenue Ranges

Revenue volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall revenue. The table below includes revenue ranges of businesses sold over the past five years and recent construction businesses listed for sale.

How Revenue and Earnings Level Affects Business Values

Clearly higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. Building and construction businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a construction business generating $3MM in revenue would likely sell for an earnings multiple over 3, where a smaller business with construction volume below $1MM may trade closer to 1.8 times earnings.

This tendency for higher revenues to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Businesses with greater revenue and earnings give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable income.

Construction Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader building and construction sector when benchmarking these types of businesses. The chart and table below include key metrics of construction businesses sold on BizBuySell between 2021 and 2025.

Most building and construction businesses trade around a similar range of valuation multiples, and the primary driver of higher or lower relative business valuations is size and sales volume. Additionally, specialty construction businesses such as HVAC may get a slight premium over general contractors, but the difference is negligible compared to revenue and earnings level.

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