Event Planning Business Valuation Multiples
From small private gatherings to large corporate functions, there is a constant demand for skilled event planners. As such, the event planning industry offers promising business opportunities. If you are buying, expanding, or selling an event planning business, determining its fair market value is vital. Business owners and buyers can utilize this information to make informed decisions. For a broad understanding of fair market value, many turn to event planning business valuation multiples.
In this article, we highlight three common valuation multiples for event planning businesses. Keep in mind that the given ranges are general market averages and may not reflect the exact value of your event planning company. For an accurate event planning business valuation, it is best to work with an experienced valuation expert.
Peak Business Valuation is a professional business appraiser that often values event planning businesses. Whether you are buying, growing, selling, or seeking financing for an event planning business, we can support you with a business valuation. We can also discuss any questions you may have about event planning business valuations. Get started by scheduling your free consultation below!
What are Event Planning Business Valuation Multiples?
Event planning business valuation multiples are financial ratios that help estimate a company’s value based on market activity. Valuation professionals determine appropriate multiples by reviewing recent transactions of similar event planning businesses. The selected multiple is then applied to a key financial figure, such as earnings or revenue, to calculate the business’s fair market value. For more insight, see Valuation Multiples for Event Planning.
Common Event Planning Valuation Multiples
When valuing event planning businesses, Peak Business Valuation often uses multiples based on SDE, EBITDA, and revenue. Each figure provides a different fair market value estimate. As such, business appraisers typically use a combination of multiples to arrive at a comprehensive valuation. Below, we outline each multiple and provide benchmarks for the event planning industry.
SDE Multiples for an Event Planning Business
Seller’s Discretionary Earnings (SDE) is one of the most widely used valuation methods for small event planning companies. SDE reflects the total financial benefit a single owner could expect from the business. It is calculated by adding the owner’s salary, discretionary expenses, and one-time costs back to the net income. Below is the valuation formula and typical multiple range.
Formula: Value = SDE × Multiple
Range: SDE multiples for event planning businesses generally range from 2.55x to 3.89x SDE.
EBITDA Multiples for an Event Planning Business
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This metric measures a company’s core profitability before non-operational expenses. It is especially helpful when valuing larger event planning companies and comparing between similar businesses in the market.
Formula: Value = EBITDA × Multiple
Range: EBITDA multiples for event planning businesses often range between 3.13x and 5.09x EBITDA.
Revenue Multiples for an Event Planning Business
Revenue multiples value an event planning business based on its total sales over a 12-month period. While this metric does not consider costs or profitability, it can be insightful when combined with SDE or EBITDA multiples for a more accurate picture.
Formula: Value = Revenue × Multiple
Range: On average, revenue multiples for event planning businesses fall between 0.60x and 1.28x revenue.
Peak Business Valuation regularly works with event planning business valuation multiples. We are here to help you understand the true fair market value of an event planning company you plan to buy, expand, or sell. We are also happy to answer any questions you may have. Schedule your free consultation by clicking the button below!
How to Value an Event Planning Business Using Multiples
When using valuation multiples to value an event planning business, valuation analysts consider a variety of other factors to ensure accuracy. A comprehensive event planning business valuation examines financial performance, operational efficiency, industry conditions, and competitive advantages. Then, weighted averages are often applied to account for unusual financial patterns. For more information, see How to Value an Event Planning Business.
Rules of Thumb for Event Planning Businesses
SDE, EBITDA, and revenue multiples are known as rule-of-thumb methods for valuing event planning businesses. While these benchmarks provide a quick estimate of value, they do not account for the unique circumstances of each business. As such, results can be misleading. For the most precise valuation, it is best to work with a professional business appraiser.
Factors Affecting Event Planning Business Valuation Multiples
Several factors can impact whether an event planning business achieves higher or lower valuation multiples. Identifying these factors can help business owners take steps to increase the value of an event planning business. Common value drivers include:
- Service Range and Specialization: Offering a diverse range of event services, such as weddings, corporate events, festivals, and nonprofit fundraisers, can increase market appeal and lead to stronger multiples.
- Supplier Relationships: Establishing long-term relationships with reliable vendors helps foster consistency in service quality and pricing. These partnerships create operational efficiency and protect margins, which strengthens the overall value of an event planning business.
- Reputation & Referrals: A satisfied client base that supports an event planning business through word-of-mouth is extremely valuable. This helps boost client acquisition at a minimal cost. As such, a strong reputation boosts the perceived value of an event planning company.
- Customer Loyalty: Repeat business from loyal clients adds stability to cash flow and reduces the risk of revenue decline. This can positively influence event planning business valuation multiples.
To learn more about increasing your event planning business’s value, see Value Drivers for an Event Planning Business.
Conclusion
If you want a quick estimate of your event planning business’s value, valuation multiples are a useful starting point. These rules of thumb provide a market-based estimate. However, event planning business valuation multiples alone may not produce accurate results. The most accurate way to determine your company’s fair market value is through a professional event planning business valuation. Certified valuation experts examine the company’s strengths, weaknesses, risks, and growth opportunities to provide a complete, defensible valuation.
As a professional business appraiser, Peak Business Valuation works with event planning businesses across the United States. We can provide a quick and accurate event planning business valuation and address any questions you have. Schedule your free consultation with Peak Business Valuation below!
For more information, see Event Planning Business Valuations or How to Value an Event Planning Business.
