Waste Management & Recycling 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 waste management & recycling businesses relative to industry standards.

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Highlights of Waste Management Businesses Sold on BizBuySell

Waste management and recycling businesses listed and sold on BizBuySell are comprised primarily of locally owned small businesses engaging in a variety of waste removal, transport, storage, and recycling activities. Businesses include trash collection, junk hauling, construction site waste management, portable toilet rentals, dumpster rentals and transport, sewage and septic services, recycling, and related activities. Less common are highly specialized and regulated businesses such as hazardous and medical waste management businesses.

The majority of businesses listed and sold in this category are independent businesses, though there are franchise brands in the space, and franchise unit sales and listings are included in this report.

Transaction Trends

Median sale prices of waste management businesses have been volatile over the past five years, due to the relatively low volume of sales and the wide range of sales classes these types of businesses operate in. From 2020 through 2024, median values of waste management businesses bought and sold on BizBuySell have fluctuated between $330k and $825k, with growth trends being largely flat.

Median days on market had been trending downwards, indicating increased demand for waste management businesses, and likely some consolidation amongst waste management owners who understand the business landscape and move quickly. In 2024, MDOM increased as deal sizes fell, indicating a greater percentage of transaction volume by inexperienced business buyers.

Waste Management & Recycling 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.

Valuation multiples of waste management and recycling businesses rose in 2021, along with the rest of the business for sale market, then returned to the mean as interest rates began to rise to combat inflation. 2024 saw a significant increase in average earnings multiple driven by a small number of transactions with unusually high valuations driving up the average. Excluding these, and the effects of the pandemic and ensuing economic factors, valuation multiples in this space tend to be fairly consistent, hovering around 3x seller's discretionary earnings, and 1x revenue.

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 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 waste management and recycling 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.

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 waste management businesses are valued between 2 and 4 times their annual seller discretionary earnings, with 25% of exceptional, large 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 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 industry financial ranges useful for comparing an individual waste management or recycling business to its peers in the market.

Waste Management Business Revenue and Earnings Trends

Median revenue of waste management businesses sold on BizBuySell fluctuates significantly depending on the makeup and sales classes of businesses sold in a given year. All of these businesses enjoy strong profit margins, coming down in 2023 and 2024 as inflationary pressures increase expenses. These businesses typically cannot adjust pricing quickly enough to make up for the added costs, bringing down profit margins for the period.

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 waste management 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 waste management businesses 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. Larger waste management firms that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a waste management company consistently generating sales over $1.5M annually may sell for an earnings multiple approaching 4, where a smaller waste management business with sales below $400k would likely sell for an earnings multiple closer to 2.

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.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader service sector when benchmarking waste management and recycling businesses. The chart and table below includes key metrics from sales of select service businesses on BizBuySell between 2020 and 2024.

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