What location does to a business's value

The Silicon Valley correction

The assumption: a business in the Bay Area must sell at a premium. Buyers there are richer, the thinking goes, and everything in Silicon Valley costs more, so a business there should too.

The data says otherwise. In full-year 2025, San Francisco businesses sold at an average cash-flow multiple of 2.43× across 131 reported sales, and San Jose at 2.27× across 76. Both sit at or below Dallas–Fort Worth at 2.54× (328 reported sales), New York at 2.52× (472), Los Angeles at 2.51× (445), and Chicago at 2.49× (194).

The Bay Area premium is real in venture capital valuations of startups. It does not show up in Main Street sale prices. Money chasing a startup is pricing a chance at an enormous outcome; money buying a working business is pricing its cash flow, and cash flow gets priced much the same way everywhere.

Zoom out and the pattern holds: across all 26 major markets in the table below, average cash-flow multiples in 2025 fell between 2.14× and 3.42×. That is a real spread, but a narrow one — nothing like the gap between one trade and another.

The 26 markets, in the data

Every figure below is an all-industry figure for that market: every kind of business that sold there in full-year 2025, combined. Read a row as the weather in that market, not as the price of any one trade in it.

Bay Area combined: San Francisco + San Jose = 207 reported sales. BizBuySell reports the two markets separately, so we show them separately — we do not blend their multiples into a number nobody published.

Source: BizBuySell Insight Report, full-year 2025 closed sales (all industries, market by market). BizBuySell Insight Report data tables

What location actually moves

Compare the spreads. The gap between metros above runs from 2.14× to 3.42×. Our per-industry guides show realized multiples from under 2× to nearly 5× depending on the trade. What a business does moves its multiple far more than where it does it.

Location works through the profit line instead. Local wages, rent, demand, and customer density decide how much seller's discretionary earnings (SDE) a business can produce in a place. Value follows the earnings: the same kind of business, earning more in a stronger market, sells for more — at roughly the same multiplier everywhere.

Same business, different city: the multiple barely moves; the achievable profit does. That is why the honest way to use location in a valuation is to get the local profit right, not to add a city premium to the multiple.

Outside the major metros

Outside the major metros there are fewer buyers, fewer reported sales, and typically longer timelines. A good business in a small market can wait a long time for the right buyer to even hear about it, and brokers there work harder to reach buyers beyond the local pool.

The honest starting point is the same one this site uses everywhere: the national industry math, applied to your real, documented profit. Documented profit travels — it is what lets a buyer from outside your area underwrite your business at all.

What we don't do

No public source publishes an industry-by-market cross-tab — what plumbers specifically sold for in Dallas, for example. That data exists behind paywalls and in brokers' private files, not in anything published that we can check. So we don't print one, and we don't invent a city premium to fill the gap.

If a broker quotes you a city premium, ask to see their sold comparables (comps). Real comparables have addresses, dates, and prices. A premium that cannot show its comps is a sales line, not data.

Run your numbers in the calculator

How this math works — the full methodology