Marine/Boat Service & Dealer 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 marine service and dealer businesses relative to industry standards.

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Highlights of Marine/Boat Service & Dealer Businesses Sold on BizBuySell

Marine service and dealer businesses listed and sold on BizBuySell are privately-owned, independently operated businesses that sell and/or service boats, yachts, ships, and personal watercraft like jet skis. These businesses may also engage in boat chartering services, specialized maintenance and repair, refitting, retrofitting, and related services.

Marine/Boat Service & Dealer Business Transaction Trends

The median sales price of marine service and dealer businesses spiked in 2020 at the height of the pandemic. At that time, a disproportionate number of large marine dealers entered the market, driving up median values. This was likely a result of the economic turmoil at the time, which forced many businesses to adapt, sell, or close.

Since then, median sale prices and sales activity of marine service businesses has returned to stable levels on par with pre-pandemic medians.

Marine Service & Dealer 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. Revenue and earnings multiples of marine service and dealer businesses have been relatively stable and generally follow the broader market which has been moving in correlation with other asset markets and interest rate policies.

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 a reasonable 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 marine service and dealer 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 marine service and dealer businesses are worth between 1.62 and 3.17 times their annual seller discretionary earnings, with 25% of exceptional, large dealers 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 financial ranges useful for comparing a given marine service/dealer business to the broader industry.

Marine/Boat Service & Dealer Business Revenue and Earnings Trends

Median revenue of marine service and dealer businesses sold on BizBuySell has been trending downward since many larger businesses sold during the pandemic, leaving smaller dealers and marine service businesses making up the majority of data in later years. Conversely, these smaller businesses selling in 2023 and 2024 have driven up average profit margins, potentially signaling a larger portion of service revenue which is generally more profitable than retail.

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 marine service and dealer businesses traded on the business for sale market. Below you will find discretionary earnings ranges for marine/boat service and dealer businesses sold over the past five years and those recently listed for sale.

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 marine/boat service and dealer businesses sold over the past five years and those recently 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. Marine service and dealer businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a boat dealer with annual sales over $3.8 million may sell for an earnings multiple of 3.2 or higher, where a smaller volume marine service business with sales below $320k may trade closer to 1.6 times earnings or less.

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 the broader business sector when benchmarking marine service and dealer businesses. The chart and table below include key metrics from sales of related auto and marine related businesses sold on BizBuySell between 2020 and 2024.

Compared to others in related or adjacent industries, marine/boat service and sales businesses are generally smaller in scale, which drives down average earnings multiples. Given the smaller average sales class, these businesses get a slight premium relative to other industries, so may increase in value at a greater rate as sales scale up.

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