Phone & Computer Repair 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 companies to provide insight into the business for sale market and important benchmarks for pricing and evaluating phone and computer repair businesses relative to industry standards.

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Highlights of Phone & Computer Repair Businesses Sold on BizBuySell

Cell phone and computer repair and service businesses listed and sold on BizBuySell include both independly owned small businesses and established franchise units like Techy, NerdsToGo, and Asurion. These businesses focus on repair and service of high-tech consumer products including smart phones, tablets, laptops, gaming computers, printers, and networking equipment. Many also include a retail element, selling chargers, cables, cases, computer peripherals, and related items.

Phone & Computer Repair Business Transaction Trends

Sale prices of phone and computer repair businesses had been generally consistent until 2021, when sale prices surged nearly 300%. There were two contributing factors to this rise: First, valuation multiples across the board reached all-time highs, creating an atmosphere for business owners to exit at atypical valuations. And second, in phone and computer repair especially, multi-unit franchise owners packaged and sold multiple locations, greatly increasing reported transaction prices.

Phone & Computer Repair Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of sales and income. 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 valuation multiples of phone and computer repair businesses sold on BizBuySell rose following the Covid-19 pandemic, peaking in 2022. This same trend occurred across the broader business-for-sale market, before valuations fell during the second half of 2022 and into 2023 when interest rates rose to combat inflation.

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 the 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 annual sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its top line 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 phone and computer repair businesses for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are usually 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. Smaller businesses with thinner profit margins, operating in small niches, with 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 phone and computer repair businesses are valued between 1.14 and 2.44 times their annual seller discretionary earnings, with 25% of higher-volume, fast-growing businesses trading above this range, and 25% of smaller, less desirable businesses trading below.

Phone & Computer Repair Business Financial Benchmarks

To determine how a business compares in terms of revenue and earnings 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 performance ranges of phone and computer repair businesses useful for comparing an individual business to the broader industry.

Revenue and Earnings Trends

Ignoring the spike caused by multi-unit franchise unit sales in 2021, median revenue of phone and computer repair businesses has been growing fairly consistently each year. Pressure on profit margins, likely due to increased costs from inflation and higher interest rates starting in 2023, has kept owner earnings from increasing in tandem. 

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 market. Below you will find discretionary earnings ranges of phone and computer repair businesses sold over the past five years, as well as recent tech business 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 phone and computer repair 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 benchmark profit margins) tend to sell for earnings multiples on the higher end. So, a phone repair shop with sales over $800k may sell for an earnings multiple close to 2.5, where a smaller phone repair kiosk with sales below $60k may trade around 1-time earnings.

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 cash flow to pay the new owner a reasonable return on the acquisition cost.

Service & Tech Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within related sectors when evaluating phone and computer repair businesses. The chart and table below include key metrics from sales of select, relevant technology and service businesses on BizBuySell between 2020 and 2024.

While phone and computer repair businesses may fall into the technology related sector, their business model, scalability, financial levers, and valuation trends really mirror service businesses. The business model requires additional labor to scale, and as such, they can not acheive profit margins at scale that online and software businesses can. The market valuation trends of phone and computer repair businesses reflects this reality, putting typical valuation multiples closer to small law firms (which also require specialized labor) than online and tech businesses. Even so, they remain some of the more profitable businesses, and remain in-demand for business buyers.

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