Business Valuation Guide
What Is a Machine Shop Worth?
Most machine shops sell for 2.2x to 3.6x Seller's Discretionary Earnings, with the midpoint near 2.9x. A machine shop with $250,000 of SDE would typically fall between $550,000 and $900,000.
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Machine shops are valued on earnings, but the equipment and the certifications behind them do more work here than in most categories. A shop with modern multi-axis CNC capability, AS9100 or ISO 9001 certification and a diversified customer base is a scarce asset. A shop running manual machines for two customers is not.
How to value a machine shop
Start with Seller's Discretionary Earnings (SDE): net profit plus the owner's pay and perks, interest, depreciation and one-time costs.
Then apply the industry multiple. For machine shops that band runs 2.2x to 3.6x, and where a specific business lands inside it is decided by the factors below. Typical SDE margin for this category runs around 15% of revenue, which is a useful sanity check: if your margin is far off that, the multiple moves with it.
Above roughly $1M to $2M of EBITDA the buyer pool changes. Individual buyers give way to private equity platforms and strategic acquirers, and pricing restates onto an EBITDA multiple of 4x to 6.5x rather than a multiple of SDE.
What raises the value of a machine shop
- Modern multi-axis CNC capability with remaining useful life
- Certifications such as ISO 9001, AS9100 or ITAR registration
- A diversified customer base across aerospace, medical, defense and industrial
- A visible backlog of released purchase orders
- Skilled machinists and a programmer who is not the owner
What lowers it
- One or two customers representing most of the revenue, which is very common here
- Manual or dated equipment requiring near-term capital replacement
- The owner being the only programmer or estimator
- No quality certification in an industry where buyers require one
- Machinist shortages in the local labor market
Who buys machine shops
Larger contract manufacturers adding capacity or capability, private-equity-backed industrial platforms, and experienced machinists or engineers buying their first shop, often with equipment-backed financing.
Selling a machine shop: what to expect
A typical sale runs 6 to 12 months from going to market to closing, assuming your financials are ready when you start. Machine shops usually carry the largest equipment values of any small business we sell, and that changes the financing. A buyer may need machinery appraised separately for the lender, and heavily depreciated CNC equipment with real market value can support borrowing that the earnings alone would not.
Machine Shop valuation: common questions
How much is a machine shop worth?
Most machine shops sell for roughly 2.2x to 3.6x Seller's Discretionary Earnings, among the stronger bands in small business, with real estate valued separately if owned. Customer concentration is the single factor most likely to pull a shop below that range.
Is the CNC equipment added to the price or included in it?
Included, because the machines produce the earnings the multiple is applied to. Adding equipment value on top of an earnings multiple double counts the same asset. Where equipment matters is in financing: lenders often want a separate machinery appraisal, and strong equipment values can support a larger loan.
Do certifications like AS9100 or ISO 9001 raise the value?
Yes, and sometimes substantially. Certification is a barrier to entry. An acquirer who needs aerospace-qualified capacity can buy your certified shop today or spend eighteen months and significant cost certifying their own. That scarcity shows up directly in the offer.
What is the average price of a machine shop?
There is no single average, because price tracks earnings rather than revenue. At the midpoint multiple of 2.9x SDE, machine shops at $500,000 of SDE sell around $1,450,000, and at $1,000,000 of SDE around $2,900,000. Typical SDE margin in this category runs near 15% of revenue, so a machine shop doing $1,000,000 in revenue would often carry about $150,000 of SDE and land near $435,000.
How much can I sell my machine shop for?
Take your Seller's Discretionary Earnings and multiply by 2.2x to 3.6x. Where you land inside that band is decided by owner dependence, customer concentration, recurring revenue and the quality of your books. A machine shop at the top of the range looks materially different from one at the bottom, and most of those differences can be improved in the twelve months before a sale.
What EBITDA multiple do machine shops sell for?
SDE multiples of 2.2x to 3.6x apply to owner-operated machine shops. Once earnings pass roughly $1M to $2M of EBITDA the buyer pool shifts to private equity and strategic acquirers, and pricing restates onto an EBITDA multiple of 4x to 6.5x. The two are not comparable: SDE includes the owner's compensation and EBITDA does not, so the same business shows a higher SDE multiple than EBITDA multiple.
How long does it take to sell a machine shop?
Typically 6 to 12 months from going to market to closing, assuming financials are ready. Machine shops usually carry the largest equipment values of any small business we sell, and that changes the financing. A buyer may need machinery appraised separately for the lender, and heavily depreciated CNC equipment with real market value can support borrowing that the earnings alone would not.
What is the machine shop valuation formula?
SDE times the industry multiple. For machine shops that multiple is 2.2x to 3.6x, so $250,000 of SDE points to $550,000 to $900,000. Recorded sales of similar businesses serve as a cross-check, and the equipment and inventory value usually sets the floor.
Is there a machine shop valuation calculator?
Yes, at the top of this page. It applies the 2.2x to 3.6x band for machine shops, adjusted for owner hours, margin and years in business, and returns a range rather than one number.
Do I need a machine shop appraisal or a valuation?
To decide whether to sell a machine shop, a market valuation: what a buyer would likely pay. A certified appraisal is usually needed only for divorce, estate, tax, litigation or a buyer's SBA loan, and costs far more.
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Multiples reflect broker transaction data including the BizBuySell Insight Report and aggregated 2024-2025 USA small business sales, and mirror the bands used by the Exit Ready valuation calculator. They are planning estimates, not a formal appraisal, and not investment advice. Market multiples move; this page was last updated 2026-08-19.