Why you cannot just look it up
Real estate sale prices in BC become public through the Land Title and Survey Authority and BC Assessment. Business sales do not. A business changes hands under a private purchase agreement, and the only shared record of the price is the sold status on the MLS system, which is visible to REALTORS through their board's system and bound by the board's rules on what they can disclose. Websites that publish 'average sold multiples' for BC are usually quoting national or American surveys, not BC transactions.
Where the real numbers are
A REALTOR who sells businesses can pull sold comparables from the MLS system for the category and area you are interested in and discuss them with you as a client. Business brokers who are not REALTORS keep their own transaction records. Accountants who advise on many sales in a sector know what deals closed at. Franchisors know exactly what their resales trade for and will often tell a qualified buyer. Ask all four.
What this site can show you
We publish what we actually have: every active MLS business listing in BC with its asking price, the median and range of asking prices by category and by city computed nightly from our own data, how many listings are new this month, and which listings have left the market recently. Our market report shows the twelve-week trend of new versus off-market listings. Treat the asking-price medians as a starting range, never as a sold price: businesses that sell often go for less than asking, and businesses that never sell drag the asking median up.
Valuing a business without a sold price
Most small BC businesses are priced on a multiple of seller's discretionary earnings, which is profit before the owner's pay, interest, depreciation and one-time items. The multiple depends on the sector, the lease, how dependent the business is on the owner, and whether the price includes property. We do not publish a multiples table because we have no BC source for one; ask your REALTOR or accountant for comparables in your specific category. A second check is the asset approach: what would it cost to replace the equipment and leaseholds, plus a reasonable payment for goodwill.
Reconstructing seller's discretionary earnings
Start from net income on the financial statements. Add back the owner's salary and benefits, interest, depreciation and amortisation, and genuinely one-time costs such as a lawsuit or a flood. Add back personal expenses run through the business only where you can see them (a vehicle, family phones, travel). Then subtract anything the seller was not paying that you will have to: a manager's wage if the seller worked seventy hours, market rent if the seller owns the building, or the cost of a licence the seller held personally. The result is what a working owner can expect to earn before financing, and it is the figure any comparable will be expressed against.
Do this for three years, not one. A single strong year at the top of a rising trend and a single strong year after two weak ones are priced very differently by experienced buyers.
Red flags in a price
- A price justified by projected rather than historic earnings.
- Add-backs that exceed the reported profit.
- Sales figures that do not match GST filings or bank deposits.
- A lease shorter than the payback period implied by the price.
- Inventory or equipment counted twice, in the price and again at closing.
If you are the seller
The sold data your REALTOR shows you is the honest basis for a listing price. Listings priced on hope sit; our recently off-market data shows how many do. Use our free evaluation request, and bring three years of statements so the conversation is about numbers.
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Frequently asked questions
Can a REALTOR tell me the sold price of a specific business?
REALTORS can use MLS sold data with their clients, subject to their board's rules on disclosure. Ask your REALTOR to walk you through comparables rather than expecting a public list.
Are the medians on this site sold prices?
No. They are computed from current asking prices in our own MLS data feed and are labelled as such everywhere they appear.
Sources
This guide is general information for British Columbia, not legal, tax or financial advice. Rules change; confirm current requirements with the regulator linked above and with your own lawyer and accountant before you buy.