Sign 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 sign manufacturing businesses relative to industry standards.

See also: Paper Manufacturing & Printing Valuation Benchmarks

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Highlights of Sign Manufacturers Sold on BizBuySell

Sign manufacturing businesses listed and sold on BizBuySell are privately-owned and operated small businesses that manufacture, print, or otherwise produce signs for commercial, industrial, and municipal customers. These include manufacturers of street signs, business and corporate signage, and to a lesser degree, signs for end consumer use.

Sign Manufacturing Business Transaction Trends

The median sale price sign manufacturers sold on BizBuySell has been consistently increasing since the Covid-19 pandemic and surged significantly in 2023 as many larger firms sold. Prices came down in 2024, but remain well above recent years.

Sign 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 sign manufacturing businesses sold on BizBuySell have been mostly consistent, though both increased in 2023 as many larger businesses sold, bringing up the averages. Valuation multiples came down in 2024 but remain elevated compared to previous years.

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. Below you will find a range of earnings multiples based on sales price and seller's discretionary earnings of sign manufacturing businesses sold in the last five years, as well as recent businesses listed for sale.

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. Below you will find a range of revenue multiples based on sales price and revenue of sign manufacturing businesses sold in the last five years, as well as recent businesses listed for sale.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of sign 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, smaller businesses listed for sale, 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.

To get timely, local market comp data, please see BizBuySell's valuation products.

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 sign manufacturers are valued and sold between 1.83 and 2.87 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 sign manufacturer financial ranges useful for comparing an individual business to its peers sold and for sale.

Sign Manufacturing Business Revenue and Earnings Trends

Median revenue of sign manufacturers sold on BizBuySell has grown notably since the height of the Covid-19 pandemic. Like many manufacturing businesses in the U.S., sign manufacturers generally benefited from a renewed interest in domestic manufacturing after supply-chain issues caused global shortages.

While owner profit margins fell with the increased revenues in 2023 and 2024, they remain a very healthy 24%, making them some of the more profitable types of businesses sold on BizBuySell.

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 sign manufacturers sold over the past five years, as well as from recent sign 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 sign 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. Sign manufacturing businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a sign manufacturer generating revenues over $1MM annually may sell for an earnings multiple approaching 3, where a smaller sign manufacturer with sales below $500k will likely trade below 2 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 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.

Manufacturing business valuations do not vary materially between individual categories but correlate tightly to sales volume. Because all these categories tend to have similar labor and capital requirements, the main criterion driving valuation is financial performance. Sign manufacturers tend to remain smaller than other types of manufacturing businesses, and so sell for smaller valuation multiples on average. At the same time, they tend to have smaller capital requirements and operating costs, so provide a good opportunity for smaller entrepreneurs to get into the manufacturing sector.

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