I would say 8–14x MRR is a reasonable baseline, but well-established businesses with a solid reputation can sell for way more.
There's pretty high demand for businesses in the $50k-$500k price range from SMB's wanting to expand. Even if it's just a client "takeover" and no other assets are involved in the sale, businesses are willing to pay quite a lot for a loyal customer base, as the cost to acquire a new customer today can easily take 6-12 months to recoup.
We've seen that especially with companies providing a niche/premium service, customers have come to appreciate the bespoke support and long-term relationships they won't get from the big players. These companies tend to be more attractive to investors as their clients are less price-conscious and won't leave at the first opportunity to save a few dollars.
Growing through acquisition can be a very efficient strategy, provided you take good care of your clients and maintain a great service.
There's pretty high demand for businesses in the $50k-$500k price range from SMB's wanting to expand. Even if it's just a client "takeover" and no other assets are involved in the sale, businesses are willing to pay quite a lot for a loyal customer base, as the cost to acquire a new customer today can easily take 6-12 months to recoup.
We've seen that especially with companies providing a niche/premium service, customers have come to appreciate the bespoke support and long-term relationships they won't get from the big players. These companies tend to be more attractive to investors as their clients are less price-conscious and won't leave at the first opportunity to save a few dollars.
Growing through acquisition can be a very efficient strategy, provided you take good care of your clients and maintain a great service.
