Most Iowa business owners who ask what their company is worth are really asking two questions: what would a buyer pay, and what would a lender finance? The answer comes from your earnings, the multiple buyers apply to them, and how much risk they see. Here is how that works in 2026, with the latest national sale data as a benchmark.
The short answer: earnings times a multiple
Most small businesses sell for a multiple of their annual cash flow. For owner-operated companies that cash flow is usually Seller’s Discretionary Earnings (SDE): pre-tax profit plus one owner’s salary and benefits, interest, depreciation, amortization and one-time expenses. Larger companies with management in place, typically above roughly $2–5 million in value, are priced on EBITDA instead. SDE multiples are lower than EBITDA multiples, so mixing them up is one of the most common pricing mistakes.
What businesses are selling for right now
BizBuySell’s Q2 2026 Insight Report tracked 2,117 closed small business sales nationally. The median sale price was $349,250 on median cash flow of $155,921 and median revenue of $692,087. The average cash flow multiple was 2.7, and the average revenue multiple was 0.7. For all of 2025, 9,586 businesses sold at a median of $350,000, and sellers received on average 94% of their asking price.
| Industry (Q2 2026) | Median sale price | What changed vs. a year earlier |
|---|---|---|
| Service | $350,000 | Price steady; multiple up 2%; 40% of all sales |
| Retail | $250,000 | Price steady; multiple up 6%; volume down 15% |
| Restaurant | $205,000 | Price down 12%; multiple up 5% |
| Manufacturing | $704,500 | Price down 10%; cash flow up 17% |
These are national figures. BizBuySell does not publish Iowa-only data, and no two businesses are alike, so treat them as a starting point rather than a price for yours.
What moves your multiple up or down in Iowa
- Owner dependence. If customers, suppliers or key know-how depend on you personally, buyers discount for the risk. Documented systems and a capable second-in-command raise value.
- Earnings trend and quality. Growing, well-documented cash flow earns a higher multiple than flat or hard-to-verify numbers. Clean tax returns matter because lenders underwrite from them.
- Customer concentration. One customer above roughly 15–20% of revenue is a common buyer concern.
- Real estate. Many Iowa sales include the building. It is valued separately from the business and can change how a buyer finances the deal.
- Financeability. Most buyers use SBA 7(a) loans, which require the business’s cash flow to comfortably cover loan payments. A price lenders cannot support usually does not close.
- Location and labor. Outside the Des Moines metro, the buyer pool is often smaller and staffing is a bigger part of the conversation, which makes a stable team especially valuable.
A quick example
Suppose an Iowa service business reports $90,000 of pre-tax profit, pays its owner $70,000, runs $8,000 of owner benefits and $12,000 of depreciation through the books, and had a one-time $5,000 legal bill. Its SDE is about $185,000. At the current national average multiple of 2.7, that points to roughly $500,000 before adjusting for the factors above. You can test your own figures in our SDE and EBITDA calculator.
Get a valuation at no charge
LegacyOne Business Brokers values Iowa businesses the way buyers and lenders will, and we do it at no charge. See how our valuations work or book a confidential consultation. Call 515-505-5269.
Sources: BizBuySell Insight Report, Q2 2026; BizBuySell 2025 Year in Review.