The 2025 data is in. Here's what it actually shows.
Total enterprise value: $7.95 billion (up 3%). Median sale price: $350,000 (up 2%). Transaction volume: flat. Cash flow and revenue: each up 3%.
On the surface, this looks like stability.
Underneath, the market is sorting. Businesses with pricing power commanded premiums. Businesses without it sat.
This divergence will accelerate in 2026.
Winners and Losers: The Data
Performance varied dramatically by sector. The table below shows the spread.
Sector | Transactions | Median Sale Price | Median Cash Flow |
|---|---|---|---|
Service | +4% | +5% to $340K | Flat |
Financial Services | +38% | +40% | +15% |
Tech Services | +12% | +15% | +6% |
Engineering | +17% | +38% | +44% |
Manufacturing | -11% | -7% to $650K | -2% |
Restaurant | -5% | Flat at $225K | +1% |
Retail | Flat | -2% to $250K | -3% |
The pattern is clear. Service businesses—particularly specialized, high-value services—are commanding stronger prices and moving faster. Manufacturing, restaurants, and retail are facing headwinds.
One broker summarized the dynamic: businesses that pass costs to customers maintain valuations. Businesses that absorb costs see compression.
The implication for searchers: sector selection matters more than it did two years ago. Pricing power is the variable that separates winners from losers.
The Buyer Pool: Who's Competing for Deals
The composition of buyers has shifted structurally. Here's the breakdown:
Corporate refugees: 44% of buyers (up from prior years)
Recently unemployed: 15% of buyers
PE activity increasing: 44% of brokers report more private equity interest
ETA/search fund activity increasing: 43% of brokers report more MBA-trained searchers
More buyers. Fewer quality deals. The result: well-documented businesses with clean financials are going under contract two to three times faster than normal, according to brokers.
For searchers, this means preparation is a competitive advantage. SBA pre-qualification, proof of funds, and the ability to move decisively separate serious buyers from the crowd.
AI in Diligence: What to Ask
Sixty-five percent of owners now use AI in their operations. Eighty-three percent report improved performance. Ten percent have reduced headcount as a result.
AI has become a valuation factor. But the opportunity cuts both ways.
Some buyers pay a premium for AI-enabled businesses—viewing them as modern and scalable. Others specifically target businesses that haven't adopted AI yet—seeing immediate margin improvement waiting to be captured.
Diligence questions to add:
Where is AI already applied? (Marketing, analytics, and customer service are most common.)
Where is margin still manual?
What's the efficiency gap between current state and AI-enabled state?
Has headcount been optimized, or is that upside still available?
The answers help you understand whether you're paying for efficiency already captured or efficiency you'll need to create.
The Noise vs. The Signal
Inflation. Rate cuts. Policy changes.
These dominated headlines in 2025. Here's what the data shows about their actual impact on deal activity:
78% of owners report rising expenses
52% raised prices to offset
28% delayed major purchases due to tariffs
But on transaction behavior:
71% of brokers say rate cuts had no impact on buyer activity
71% say cuts aren't bringing more buyers to market
71% report buyers are not delaying due to rates
One broker put it directly: "This is a myth that buyers sit around and wait for rate drops. Buyers buy."
The real drivers remain unchanged: business performance, buyer readiness, personal timelines. Macro conditions create narrative. They rarely change transaction behavior.
2026 Outlook: Supply Up, Demand Up, Competition Intensifies
Broker expectations for the first half of 2026:
72% expect more sellers entering the market (driven largely by Boomer retirements—49% of current listings are already from Boomers)
61% expect stronger buyer demand
80% expect higher overall deal volume
More supply. More demand. Intensifying competition for quality.
The sorting that defined 2025 will accelerate. Premium businesses will move fast. Commodity businesses will sit.
Disclaimer: This guide is for educational purposes only and does not constitute legal, financial, tax, or investment advice. Business acquisitions involve significant risks, and outcomes can vary widely based on individual circumstances. Always consult with qualified professionals including attorneys, CPAs, and financial advisors before making acquisition decisions. The EBIT Community does not guarantee the accuracy of information provided or the success of any acquisition strategy. Past performance and examples do not guarantee future results.
