Why do two businesses with similar sales sometimes sell for very different prices?

Revenue tells only part of the story. Buyers often evaluate profitability, cash flow, customer concentration, management, employee retention, growth opportunities, lease terms, market conditions, and business risk in addition to annual sales.

For example, one business may generate similar revenue but require the owner to work sixty hours each week, while another operates successfully with an experienced management team.

Understanding these differences helps explain why market value is rarely determined by revenue alone.