Dance & Fitness Studio 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 dance and fitness studios relative to industry standards.

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Highlights of Dance & Fitness Studios Sold on BizBuySell

Dance and fitness studios are popular businesses listed and sold on BizBuySell. These businesses range from dance studios, yoga and Pilates studios, HIIT and cardio focused fitness studios, to boutique and niche fitness shops. There are many franchise brands in this space, but most established businesses sold are independent brands.

Dance & Fitness Studio Business Transaction Trends

The social distancing measures put in place during the Covid-19 pandemic had a large impact on the fitness studio industry, and consequently, the acquisition market. Many large businesses chose to sell at this time, driving up median sales prices. In the years following, prices returned to pre-pandemic levels and have been growing consistently.

Dance & Fitness Studio 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 financial performance, 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.

Average revenue and earnings multiples of fitness studios sold on BizBuySell tend to ebb and flow with economic conditions. Average valuation multiples hover around 0.6-times annual revenue, and 2-times annual owner earnings.

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 business valuations 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 overall sales.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of fitness studios for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are generally 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 volume, 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. Lower volume businesses with 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 fitness studios are valued between 1.33 and 2.36 times their annual seller discretionary earnings, with 25% of well-run, larger studios trading above this range, and 25% of smaller, less popular studios trading below.

Financial Benchmarks

To determine how a business compares in terms of revenue and earnings 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 financial ranges useful for comparing an individual dance or fitness studio business to its peers in the market.

Dance & Fitness Studio Revenue and Earnings Trends

Median revenue of dance and fitness studios is typically between $200k and $300k, but the pandemic drove many large businesses to sell, bringing median revenue up to $550k. In the years following, both median revenue and median owner earnings has grown steadily, reaching $316k and $98k in 2024, respectively. Consistently strong margins make dance and fitness studios some of the most profitable types of small business.

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 businesses traded on the market. Below you will find discretionary earnings ranges for dance and fitness studios sold over the past five years, as well as recent for sale listings.

Revenue Ranges

Sales 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 dance and fitness studios sold over the past five years, as well as recent for sale listings.

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. Successful fitness studio that consistently generate higher revenue (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a dance studio consistently generating sales approaching $500k annually may sell for an earnings multiple around 2.4 or higher, while a smaller yoga studio with sales below $150k may sell for an earnings multiple closer to 1.3 or less.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Higher volume businesses 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 the broader health and fitness sector when benchmarking fitness studio businesses. The chart and table below include key metrics from sales of select health and fitness businesses on BizBuySell between 2020 and 2024.

Dance and fitness studios skew towards the lower end of the range in terms of revenue potential compared to other businesses in the space, and so typically sell at lower valuation multiples, though they appear to get a slight premium.

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