Rubber & Plastic Product Manufacturing 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 rubber and plastic product manufacturing businesses relative to industry standards.

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Highlights of Rubber & Plastic Product Manufacturers Sold on BizBuySell

Rubber and plastic manufacturing businesses listed and sold on BizBuySell are privately-owned and operated small businesses providing high-quality materials and products for both consumers and manufacturers. Utilizing various methods such as 3D printing for precise and cost-effective designs, injection molding for consistent large-scale production, and custom moldings for custom solutions, these businesses meet a wide range of needs. Their products range from everyday consumer items to specialized industrial components.

Rubber & Plastic Product Manufacturing Business Transaction Trends

The median sale price of rubber and plastic manufacturers sold varies widely from year to year, driven by the volume of businesses in different sales classes. More recently, in 2023 and 2024, the make-up has skewed towards larger businesses selling, bringing the median sale price up more than double previous years.

Rubber & Plastic Product Manufacturing 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. Revenue and earnings (seller's discretionary earnings) multiples of rubber and plastic manufacturers sold on BizBuySell have been fairly volatile, generally increasing as larger manufacturers enter the business-for-sale market and drive up valuations. Revenue multiples remain somewhat steady, hovering around 1, but the more important earnings multiple has seen averages increase from 2.5 to 4.4 over a 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 - business valuations tend to 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 rubber and plastic product manufacturing 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. When current listing multiples are lower, that signifies decreasing values or previously inflated values of sold 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 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 plastic and rubber product manufacturers are valued and sold between 2.8 and 4.9 times their annual seller discretionary earnings, with 25% of well-run, 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 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 rubber and plastic product manufacturer financial ranges useful for comparing an individual business to its peers sold and for sale.

Rubber & Plastic Product Manufacturing Business Revenue and Earnings Trends

Median revenue of rubber and plastic manufacturers sold on BizBuySell has grown dramatically since the Covid-19 pandemic. Manufacturing businesses in the U.S. generally benefited from a renewed interest in domestic manufacturing after supply-chain issues caused global shortages.

Median discretionary earnings, however, did not follow the revenue trend. While median revenue peaked in 2024, median earnings fell from 2023 as profit margins thinned, potentially the result of inflation and increasing cost of goods.

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 reported owner's discretionary earnings ranges of rubber and plastic product manufacturers sold over the past five years, as well as from recent rubber and plastic manufacturing 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 rubber and plastic product manufacturers 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. Rubber and plastic product manufacturing businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a plastic manufacturer generating revenues over $3MM annually may sell for an earnings multiple in the 4's or higher, where a smaller plastic manufacturer with sales below $700k may trade under 3 times 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 left over to pay the new owner a reasonable return on the purchase price.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader manufacturing sector. The chart and table below include key metrics from sales of manufacturing businesses on BizBuySell between 2020 and 2024. Note the tight correlation between median revenue and average earnings multiple.

Like most types of manufacturing businesses, rubber and plastic product manufacturer valuations follow the size / earnings multiple trendline fairly closely, though recent sales have shown a slight premium paid compared to other types of manufacturing businesses, likely because rubber and plastic manufacturers show some of the largest owner profits.

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