Business Services Company Valuation
29 valuation methods · 43 industries · Results in under 10 minutes
In short
Business services firms sell their people's time and expertise, so buyers look hardest at how much of the revenue depends on the owner and how much of it repeats. VA blends seller's discretionary earnings into the value of a smaller owner-run professional firm, values a smaller training company mainly on it, and values larger firms and staffing agencies on cash flow and market evidence.
How businesses in this sector are valued
Most of what a business services firm sells is its people's time, so a buyer asks how much of the revenue would stay if the owner stepped back. For a smaller owner-run professional firm, VA blends seller's discretionary earnings, EBITDA plus the owner's pay, times a multiple drawn from small-business transaction data, with a discounted cash flow, comparable companies, precedent transactions and a bottom-up view of the firm's economics; a smaller training company is valued mainly on seller's discretionary earnings. Larger firms and staffing agencies are valued on a discounted cash flow, comparable companies, precedent transactions and, for professional services and staffing, a bottom-up view. Retainers, multi-year contracts and a management team that runs the work without the owner all make the earnings easier to keep, and buyers pay for that.
Guides in this sector
Professional Services
Value a consulting, accounting or agency business on its earnings, with seller's discretionary earnings in the blend for a smaller owner-run firm.
Accounting Firm
Value a CPA or accounting firm on its earnings, with recurring clients, partner succession and client concentration read the way buyers read them.
BPO
Value a business process outsourcing company on its earnings, with client contracts, delivery costs and concentration read the way buyers read them.
Compliance Services
Value a compliance services firm on its earnings, with recurring monitoring work, client concentration and the owner's role read the way buyers read them.
Legal Services
Value a litigation support, e-discovery, court reporting or legal outsourcing company on its earnings, with client concentration read as buyers do.
Marketing Agency
Value a marketing, digital or creative agency on its earnings, with retainers, client concentration and the founder's role read the way buyers read them.
Regulatory Consulting
Value a regulatory consulting firm on its earnings, with specialist expertise, repeat clients and the founder's role read the way buyers read them.
Testing and Inspection
Value a testing, inspection or certification company on its earnings, with accreditations, recurring inspections and lab equipment read as buyers do.
Staffing
Value a staffing or recruiting agency on its earnings, with margin per hour, client concentration and recruiter productivity read the way buyers do.
Commercial Staffing
Value a light industrial, warehouse or clerical staffing firm on its earnings, with margin per hour, clients and insurance costs read as buyers do.
Executive Search
Value an executive search or retained recruiting firm on its earnings, with partner relationships, repeat clients and fees read as buyers do.
PEO and HR Outsourcing
Value a PEO or HR outsourcing company on its earnings, with net revenue, worksite employees and client retention read the way buyers read them.
Professional Staffing
Value an IT, finance, engineering or legal staffing firm on its earnings, with contractor margins, client mix and recruiter productivity read as buyers do.
Education & Training
Value a school, tutoring, training or childcare business on its earnings, with seller's discretionary earnings weighing most for a smaller one.
Corporate Training
Value a corporate training company on its earnings, with repeat clients, content ownership and the founder's role read the way buyers read them.
Value your business in under 10 minutes
- 1.Upload your financial statements, or type the figures in.
- 2.Confirm the add-backs and the industry details the model asks for.
- 3.Get a valuation range, the methods behind it and a PDF memorandum.
Further reading
Is a Business Worth 3 Times Profit? When It Is 2x, When It Is 5x, and Which Profit Counts
Is a business worth 3 times profit? Often, if the profit is SDE. When 2x or 5x applies instead, which profit counts, and what diligence does to the price.
How Much Is a Business Worth With $500,000 in Sales? The Revenue Ladder From $100K to $3 Million
Revenue does not set a price, earnings do. See what businesses at $100K, $200K, $300K, $500K, $1M, $2M and $3M in sales are worth at 10%, 20% and 30% margins.
Customer Concentration: The Silent Discount on Your Business's Value
When one customer is 20% or more of revenue, buyers cut the price, restructure the deal, or walk. Here's how concentration is measured, what it costs in practice, and the 18-month fix.
Frequently asked questions
How is a professional services firm valued?
A smaller owner-run firm is valued on a blend that includes seller's discretionary earnings times a multiple drawn from small-business transactions. Larger firms are valued on cash flow and market evidence. In both cases, revenue that depends on the owner lowers the value.
How is a staffing agency valued?
On its earnings, checked against a discounted cash flow, comparable companies and precedent transactions. Buyers look at gross profit per placement, client concentration and how much of the business the recruiters bring in without the owner.
Why does owner dependence lower the value?
If clients follow the owner rather than the firm, a buyer may lose them after the sale. Firms with a second layer of managers and written processes keep more of their revenue through a change of owner.
Do retainers and contracts matter?
Yes. Revenue under retainers and multi-year contracts is more likely to continue after a sale than project work, so buyers value it higher.
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Last reviewed September 25, 2026 against VA's valuation models.