Checking in on Main Street valuations

Over the past few months, as we released our reports on mid-market M&A (USA, UK), we’ve focused a lot of this newsletter on the insights drawn from mid-market valuation activity, looking at how buyers, sellers, and advisors are responding to changing economic conditions. (And a big thank you to everyone who has engaged with us on these topics, it’s been fascinating to hear your views.)

But don’t worry, we haven’t forgotten about those owner-operated businesses who continue to be highly valued clients, partners, and friends of ours. So, this month, we’re returning to Main Street to analyse our latest data on this section of the market. This is a world we’re very passionate about and one that we continue to serve in a myriad of different ways.

What follows is not a single thesis, but a rapid-fire snapshot of what we’re currently seeing across Main Street valuations on the bizval platform. These are observations rather than predictions, and you should think of them as a pulse check on how value is being expressed, discounted, and rewarded in this part of the market.

Let’s dive in.

Average valuations increase materially with the age of the business. Companies less than three years old attract the lowest average values, while businesses operating for more than ten years are valued at more than double those under five years.

But this is not simply about size. Longevity acts as a proxy for several risk-reducing factors that valuers consistently price in: survival through multiple cycles, established customer relationships, and proven cash-flow patterns.

Takeaway: On Main Street, time in the market remains one of the strongest signals of resilience. Younger businesses continue to face a significant valuation discount, reflecting uncertainty rather than ambition.

One of the starkest valuation differentials appears around owner involvement. Businesses where the owner is involved full-time, with limited ability to step away, show dramatically lower average values than those that can operate independently.

We’ve spoken about this a lot over the years, but it still remains an incredibly important concept for owner-operators. It’s critical that owners focus on systems, delegation, management depth, and operational repeatability as early as they can because, from a valuation perspective, owner dependency remains one of the clearest indicators of key-person risk and the market continues to price that risk decisively.

Takeaway: Whether cause or consequence, owner dependency is consistently reflected in Main Street valuations. Businesses that rely heavily on a single individual remain more vulnerable to discounting.

Valuations rise meaningfully where future growth is expected, but the relationship is not linear and can be a bit messy. More growth does not always result in a higher valuation. This suggests that credibility matters as much as ambition. Buyers and valuers appear more comfortable pricing growth that is plausible and supported by historical performance than aggressive projections that introduce execution risk.

Takeaway: On Main Street, growth expectations still matter, but believable growth is valued more consistently than optimistic projections, and contraction is punished early.

Average valuations vary widely by sector. Service-based and advisory businesses (particularly those with repeatable revenue and low capital intensity) continue to command higher average values than asset-heavy or margin-constrained sectors.

This largely reinforces long-standing valuation dynamics rather than revealing new trends. Defensibility, recurring revenue, and pricing power remain highly valued characteristics, regardless of business size.

What is going to be very interesting to watch over the next 12 months is how advancing AI and automation disrupts this value hierarchy. As agentic AI starts to become more capable and widespread, we might expect to see quite a different picture in a year from now. Only time will tell…

Takeaway: Sector still matters on Main Street, but not in new ways. Familiar preferences for repeatability and defensibility continue to dominate valuation outcomes.

It’s no secret that average valuations differ meaningfully by region. Businesses in North America and Europe sit at higher average values than those in Australasia and Southern Africa. But these differences should never be read as a reflection of business quality alone. Market depth, buyer pools, access to capital, and transaction liquidity all influence how value is expressed in different regions.

For Main Street businesses, geography continues to shape both opportunity and constraint, particularly when it comes to exit optionality.

Takeaway: Regional valuation gaps persist, reflecting structural market factors rather than purely operational performance.

Taken together, these observations point to something notable: the drivers of value have stayed mostly the same.

Across Main Street, the market continues to reward:

• Longevity and survival

• Reduced key-person risk

• Credible growth

• Operational independence

• Transferability

 At the same time, the penalties for fragility, concentration, and uncertainty remain significant.

Of course, Main Street data is inherently noisier and more volatile than mid-market data, and we’re only pulling from our internal data for this analysis, but there is a lot to be gleaned from these snapshots. As we continue to monitor valuation activity across Main Street and the mid-market, these smaller-business signals provide useful context for understanding how risk and value may evolve further up the market.

We’ll continue checking in and bringing you insights as we unearth them. But if you have any thoughts, comments, stories, or ideas of our own - we’d love to hear them! Just reply to this email and let us know what you think.