Fitness Business Are On The Rise — Here's Why - video Dailymotion

Forbes

Health and wellness businesses were in high demand in 2024, with their price-to-sales ratios jumping 18% according to data from BizBuySell. Meanwhile, ice cream shops saw melting multiples.  Read the full story on Forbes: https://www.forbes.com/sites/brandonkochkodin/2025/02/18/the-best-small-businesses-to-buy-now/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Here's your Forbes daily briefing for Thursday, February 20th.

00:05Today on Forbes, the best small businesses to buy now.

00:11In 2024, small business buyers weren't looking for dessert.

00:15Instead, they were looking to sweat.

00:18Fitness businesses got more expensive and ice cream shops got cheaper.

00:22According to data from BizBuySell, an online marketplace for small businesses

00:27and a division of Arlington, Virginia-based CoStar Group,

00:30which has a $30 billion market capitalization.

00:34Gyms saw their price-to-revenue multiples jump from 0.72x to 0.85x,

00:40an 18% year-over-year increase,

00:43the biggest gain among 23 small business sectors it tracks

00:47that had greater than the median number of transactions in both 2023 and 2024.

00:52Ice cream shops, 0.56x down to 0.54x,

00:57and hair salons, from 0.52x to 0.5x,

01:02meanwhile, tied for the worst performance,

01:05with both seeing their price-to-revenue multiples drop by 4% from 2023 to 2024.

01:12Price-to-revenues, or sales,

01:14represents the amount acquirers are willing to pay

01:17as a multiple of an enterprise's annual revenues.

01:20While many small businesses routinely change hands at less than 1x annual sales,

01:25the large publicly-traded companies in the S&P 500 Index

01:29trade for an average of more than 3x revenues,

01:32and tech companies like Apple command more than 9x annual revenues.

01:37The highest price-to-sales ratio among the 9,530 deals that BizBuySell surveyed in 2024

01:44came from bed-and-breakfast establishments,

01:47which changed hands for a median price of $1.5 million,

01:51which was an average of 2.76x annual revenues.

01:55The lowest multiples came from car dealerships,

01:58which sold for 0.23x revenues and had a median sales price of $600,000.

02:05The market shift evident in BizBuySell's 2024 report

02:09reflects a change in how people have been approaching fitness.

02:12U.S. health club memberships topped 70 million in 2023 for the first time,

02:16according to the Sports & Fitness Industry Association.

02:20More people are exercising on their own, too.

02:23156.1 million reported running or walking for fitness,

02:27the highest number ever recorded.

02:30According to the Sports & Fitness Industry Association,

02:3215% of fitness clubs shut down during COVID.

02:36That means demand is up, supply is down,

02:39and small business buyers think fitness, not indulgence, is the future.

02:44Lisa Riley, founder and president

02:46of Scottsdale, Arizona-based Delta Business Advisors,

02:49a business sales brokerage, says,

02:52"...we're on a health kick as a society."

02:55But the fact is that fitness brands come and go.

02:58What's hot today will be tomorrow's punchline.

03:01Just ask anyone who bought sweat-into-the-oldies VHS tapes

03:04or threw punches with Billy Blanks in a Taibo class.

03:08More recently, SPIN and CrossFit had their moments,

03:11and participation in both has dropped more than 5%

03:14over the last five years,

03:15according to the Sports & Fitness Industry Association.

03:18And the days of fighting for a spot in a SoulCycle class are over.

03:22Now there's plenty of room, if you can find a studio.

03:25Peloton hasn't fared any better.

03:28Its stock is still down more than 50%

03:30from its pre-COVID initial public offering,

03:32not to mention the 90%-plus plunge

03:35from its pandemic-induced bubble peak.

03:38Daycare centers and convenience stores

03:40were two other big winners.

03:42Riley says that daycare centers,

03:44where the price-to-revenue multiple rose by 16% last year

03:47for an average of 0.85,

03:50have benefited from two tailwinds.

03:52The gradual shift back to in-office work

03:54has pushed up demand,

03:56while COVID wiped out many providers, shrinking supply.

04:00Convenience stores,

04:01which sold for a median price of $200,000

04:04and an average of 0.41 times annual sales,

04:07have always been a strong market.

04:09But Riley says the prospect of tighter U.S. immigration policies

04:12has made them even more appealing.

04:15These businesses have long been owned by immigrants

04:18and those looking to immigrate.

04:20With stricter visa policies on the horizon,

04:22buying a convenience store

04:23could provide a legal pathway into the country.

04:27For full coverage,

04:28check out Brandon Cocodin's piece on Forbes.com.

04:33This is Kieran Meadows from Forbes.

04:35Thanks for tuning in.

04:39For more information visit www.forbes.com

Fitness Business Are On The Rise — Here's Why

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