Concrete 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 concrete businesses relative to industry standards.

See also: Heavy Construction Business Valuation Benchmarks

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Highlights of Concrete Businesses Sold on BizBuySell

Concrete businesses listed and sold on BizBuySell are primarily contractors and subcontractors engaging in the mixing, pouring, and finishing of concrete structures. Some of these companies focus on driveways, walkways, patios, foundations and slabs. Others may focus on architectural and pre-cast forms. Still other concrete contracting companies operate in niches such as specialized finishes or interior forms.

Most concrete businesses listed and sold on BizBuySell are locally owned and independently operated, though franchises do operate in this space and are included in the data set.

Concrete Business Transaction Trends

Sale prices of concrete businesses have been fairly consistent since 2020, with the exception of 2023 when median price spiked, driven by an influx of larger concrete companies being sold. In general, values have been stagnant since the Covid-19 pandemic.

Concrete 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 of concrete contractors and concrete businesses have been fairly stable, with material growth in average earnings (cash flow) multiples in 2023 and 2024, despite pressure from higher interest rates.

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 often 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 concrete 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 concrete businesses are valued between 1.76 and 2.66 times their annual seller discretionary earnings, with 25% of exceptional, larger businesses trading above this range, and 25% of 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 concrete contractor businesses sold to generate ranges useful for comparing a concrete business to the broader industry.

Concrete Business Revenue and Earnings Trends

Median revenue of concrete businesses sold on BizBuySell fell materially during the Covid-19 pandemic and remained depressed until 2023, when median revenue rose above pre-pandemic levels. It's likely that concrete businesses that struggled to stay afloat in the pandemic years were forced to sell, then the healthier businesses made their exit later at higher valuations. In 2024, median revenue returned to hover around the $1MM mark.

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 concrete 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 concrete 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 concrete 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. Concrete contractors and concrete businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a concrete contractor with annual construction volume of $3MM may sell for an earnings multiple around 2.7, where a smaller concrete business with construction volume below $1MM may trade below 2 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 concrete businesses. The chart and table below include key metrics of construction related businesses sold on BizBuySell between 2020 and 2024.

Concrete contractors and similar concrete businesses tend to sell around the average earnings multiple of most construction businesses. The business model and financial performance of these businesses are similar, so the primary driver of higher or lower values tends to be construction volume.

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