Building Material & Hardware Store Business Valuation Benchmarks

Business owners and prospective buyers 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 building material and hardware stores relative to industry standards.

Jump To:

Highlights of Building Material & Hardware Stores Sold on BizBuySell

Building material and hardware stores listed and sold on BizBuySell include a variety of retail businesses serving the construction industry and homeowners. These include, but are not limited to, general hardware stores, flooring stores, roofing supply stores, plumbing supply stores, paint and finishing product retailers, kitchen, bath, and tile stores, marble and granite retailers, and retail lumber yards.

Building Material & Hardware Store Business Transaction Trends

The median sale price of retail building material and hardware store businesses has been volatile over the past five years. Prices declined in 2022 and 2023, potentially as larger businesses held off selling amid economic uncertainty. The market rebounded strongly in 2024, with median sale price reaching $1.15 million, before settling back to $950,000 in 2025, still near the five-year starting point.

Building Material & Hardware Store 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 retail building and construction supply businesses have followed broader market trends, declining in 2022 and 2023 as interest rates increased to tamp down inflation. Multiples rebounded in 2024, returning near the 2021 high-water mark, and have remained strong into 2025, with the average revenue multiple reaching 0.64, the highest of the five-year period. 

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 - most valuations will 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 retail building material and hardware store 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.

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 hardware store and retail building supply businesses are worth between 2.02 and 3.86 times their annual seller discretionary earnings, with a minority of exceptional, larger businesses trading above this range, and some 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 retail building supply and hardware store businesses sold to generate ranges useful for comparing a business to the broader industry.

Building Material & Hardware Store Business Revenue and Earnings Trends

Revenue and earnings of retail building supply and hardware store businesses sold over the last five years has been volatile, influenced by economic conditions and the mix of businesses that sold each year. Median revenue dipped in 2022 and 2023, then surged to $2 million in 2024 before settling at $1.6 million in 2025.

From the beginning to end of the five-year period, median revenue of hardware store and building material businesses sold decreased 9%, while owner's discretionary earnings increased 4%. Profit margins have fluctuated between 13% and 22%, averaging 17.2% over the period.

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 similar businesses traded on the business for sale market. Below you will find discretionary earnings ranges for building material and hardware store businesses sold over the past five years, as well as recent 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 building material and hardware store businesses sold over the past five years and recent 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. Businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a construction supply business generating $3MM may sell for an earnings multiple of 3.7 or better, where a smaller hardware store with sales volume below $1MM may sell for something closer to 2 times owner 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.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within relevant sectors when benchmarking these types of businesses. For building supply and hardware store businesses, both the building and construction, and retail sectors provide some context.

Building & Construction

The chart and table below include key metrics of construction related businesses sold on BizBuySell between 2021 and 2025.

Retail

The chart and table below include key metrics of select retail businesses sold on BizBuySell between 2021 and 2025.

Compared to service businesses in the construction category, construction supply and hardware stores tend to sell at a slight premium relative to their sales volume. When comparing hardware and building supply stores to the retail category, the valuations are more in-line with the normal distribution.

More Resources and Tools from BizBuySell

Thinking of buying or selling a business? BizBuySell has the tools, resources, and professionals you need to get down to business.