School 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 schools and educational businesses relative to industry standards.

See also: Preschools and Day Care Businesses

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Highlights of School Businesses Sold on BizBuySell

Schools and educational businesses sold on BizBuySell include a range of education-focused businesses, including K-12 private schools, tutoring and test-prep centers, vocational and trade schools, cosmetology and beauty schools, music and arts academies, computer and STEM education programs, and fully online or hybrid academies. These businesses are typically individually owned and operated brands, though many franchise brands operate in this space, and are included in the data set.

School Business Transaction Trends

The median sale price of schools and educational businesses sold on BizBuySell has been volatile year to year, ranging between $200k and $500k as the make-up of sales skew towards smaller or larger schools.

School 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.

Schools and educational businesses typically see average earnings multiples between 2.5 and 3, but in 2023 valuations dropped sharply, to an average earnings multiple of 1.9. Multiples rebounded in 2024, and in 2025 reached a new high average.

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 will 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 school businesses 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. Local business sale comps by sales class suitable for pricing and negotiations are available in BizBuySell's Business Valuation Report.

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 school businesses are valued between 1.56 and 2.94 times their annual seller discretionary earnings, with 25% of popular, larger schools trading above this range, and 25% of smaller, less popular ones 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 school business to its peers in the market.

School Business Revenue and Earnings Trends

Median revenue of schools and education businesses sold on BizBuySell had been declining, until 2025, when median revenue rose 37%. At the same time, median owner earnings fell 20%, indicating significant new pressures on profit margins.

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 school businesses 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 schools 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 schools that consistently generate higher revenue (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, an after-school STEM program with sales of $850k annually may sell for an earnings multiple near 3, while a smaller test prep business with sales of $375k may sell for an earnings multiple closer to 1.5.

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.

The other major factor that will affect valuation multiples is the real estate involved in the transaction, and whether its owned or leased.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader child care and education category when benchmarking EDU businesses. The chart and table below include key metrics from sales of select child care and education businesses on BizBuySell between 2021 and 2025.

There is a strong correlation between sales volume and earnings multiple across all education businesses sold. The larger the school, greater the number of students, and lower the churn rate, the more valuable the business relative to its earnings. Schools catering to younger students tend to do well, simply because small children do not have access to public schools, and so rely on prive schools exclusivley.

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