David's Deal Digest - January 2026

Hi there,

It’s still me, David Downing, your friendly neighborhood business broker helping small business owners and buyers across Texas navigate valuations, exits, and acquisitions.

You may notice this email is now coming from newsletter.mainstreetbizsales.com instead of texasbizsales.com. The old site still redirects here, but I wanted to give you a heads-up as I continue consolidating everything under one home.

If you’re new here, welcome to David’s Deal Digest. Each month, I share what I’m seeing in the small business market, practical lessons from real transactions, and a few reflections from life and work that help keep everything in perspective.

Quick highlights in this issue:

• What 74 Texas businesses actually sold for in 2025

• Why SBA eligibility quietly shapes valuation ceilings

• How E-2 visa buyers can expand the buyer pool for sellers

• An easy way to upgrade your professional presence

• A mindset shift for starting 2026 with clarity

👨‍👦 Personal Update: Riding the Waves with Mickey Mouse

Life at home continues to move fast.

Our younger son, Theo, is now four months old, and my wife is heading back to work after maternity leave. As anyone with young kids knows, that transition brings another round of recalibration. New schedules, new handoffs, wildly expensive childcare, and the promise of constant change. As someone who thrives on routine, it’s been hard to cope, but the rewards of a growing family are so rich.

In the middle of all that, I had the chance to do something special. I took my older son on our first Disney Cruise with just the two of us, plus my mom (or as Owen calls her, “GiGi”). No emails or phone scrolling. Just chasing down Disney characters and unlimited soft serve.

Watching my son experience it all was genuinely magical. It was a reminder of how valuable focused, uninterrupted time really is.

For anyone living in Houston, a practical tip I did not fully appreciate until now: cruises out of Galveston are an incredible family vacation hack. No airfare. You park next to the ship. Once onboard, everything is included. That reduction in logistical friction matters a lot when you are traveling with kids. 10 out of 10, would recommend!

In a season full of change, those few days of simplicity and connection were well appreciated.

📊 2025 Market Snapshot: Where Valuation Actually Starts

One of the most common questions I hear from both buyers and sellers is deceptively simple: Where do you even start when valuing a business?

While every deal has nuance, most small businesses are ultimately valued as a multiple of cash flow, typically Seller’s Discretionary Earnings (SDE) for owner-operated businesses, or adjusted EBITDA for larger or more manager-run companies.

In plain English, buyers aren’t asking, “How much revenue does this business do?”
They are asking, “How much reliable cash flow will this business generate for me?”

To help ground that conversation in reality, I pulled 2025 closed transaction data from PeerComps, which tracks thousands of actual small business sales, not asking prices.

Texas Market Snapshot (Closed Deals in 2025)

• 74 closed transactions in Texas (out of 820 nationwide)

• Median sale price: $1.17M

• Median revenue: $1.87M

• Median SDE: $375K

• Median SDE margin: 22%

• Median multiple on SDE: 3.25x (95% of deals fell between 2.1x and 4.4x)

• Median multiple on EBITDA: 4.09x (95% of deals fell between 3.2x and 5.0x)

• Median multiple on revenue: 0.72x (95% of deals fell between 0.1x and 1.5x)

  

Three Quick Takeaways

1. Most deals close in a narrow, predictable range
In Texas, 95% of deals closed between 2.1x and 4.4x SDE. Large outliers are rare.

2. These multiples assume SBA-eligible businesses
PeerComps data skews toward businesses that qualified for SBA financing. If a business cannot support SBA debt, it should not expect these multiples and will often require creative structures such as seller financing.

3. Cash flow beats revenue, every time
Median revenue was $1.87M, but the median revenue multiple was just 0.72x. Buyers pay for clean, reliable cash flow, not top-line size.

Bottom line: Valuation is not about chasing the highest multiple you heard from a friend of a friend. It’s about where a business fits relative to real, closed deals and what buyers and lenders can actually support.

Clean, financeable cash flow pulls you toward the center or top of these ranges. Messy or hard-to-finance businesses don’t.

🌍 Immigration Corner: Buying a Business With an E-2 Visa

This matters more than many sellers realize.

I’ve had several conversations recently with international buyers exploring U.S. business ownership through the E-2 investor visa.

In short, the E-2 visa allows citizens of certain treaty countries to live and work in the U.S. by investing in and actively operating a U.S. business. It’s a popular path for buyers who want both business ownership and the ability to reside in the United States.

I asked Scott Hershenson, owner of Hershenson Immigration Law Firm, to share the key considerations buyers should understand early. Here are the big ones:

1. Majority ownership and control are required.
   Passive investments do not qualify. The investor must actively direct and manage the business.

2. The business must be active and operating.
   It needs to provide real goods or services. Holding assets, such as real estate alone, generally does not work.

3. The investment must be substantial relative to the business.
   For many small businesses, this often means an investment of roughly $150,000 or more, depending on the situation.

4. A physical commercial location matters.
   Brick-and-mortar businesses are typically viewed more favorably than purely virtual operations.

Why sellers should care: E-2 buyers can be a motivated and attractive buyer pool, especially for operational, brick-and-mortar businesses. The key is aligning deal structure with immigration rules early, before issues surface late in the process.

📸 Your First Impression, Upgraded

When someone hears your name, they look you up. You get about three seconds to make a first impression.

If the photo they find is outdated, pixelated, or cropped from a family vacation, that impression isn’t helping you.

That’s where Maureen O’Shay comes in. Maureen is a trusted friend of mine and one of the few photographers who combines strong artistic skill with real strategic intent. With over 15 years of experience and a background in PR, marketing, and branding, she helps professionals and business owners show up with confidence and authenticity.

This matters in transactions. Strong visuals help establish credibility and trust between buyers and sellers before a single conversation has even occurred.

If you’ve been meaning to upgrade your professional headshot, elevate your personal brand, or capture family moments you want to keep for life, reach out to Maureen.

Website: www.maureenoshay.com
Email: [email protected]
Phone: 832-356-9749

🧭 Vitamin N: The Season of “No”

This time of year, a lot of people are thinking about improvement. Better habits. Better systems. More energy. More progress.

Usually that means adding things in. Vitamin C for immunity. Vitamin D for mood and resilience. Vitamin B for energy and focus.

But there’s another supplement that rarely makes the list:
Vitamin N

Vitamin N is the ability to say NO.

With two young kids at home, I’ve become much more aware of how limited time and attention really are. The constraints are obvious now. Even small commitments carry a real cost, whether that’s energy, patience, or presence.

At first, saying no felt like giving something up. Opportunities. Optionality. Momentum. Over time, though, I’ve realized that no is often what makes room for what actually matters.

As we move into a new year, it’s worth asking a different kind of question. Not “What habits should I add?”, but “What do I need to cut out to create space for the goals I actually care about?”

Vitamin N can’t be bought on Amazon, but it’s an essential supplement for living a purposeful life.

Until Next Month

If you or someone you know is thinking about buying or selling a business in 2026 and could benefit from a conversation around valuation, exit planning, or financial strategy, I’m always happy to connect.

Thank you for reading and for being part of this community.

Sincerely,
David

David Downing
📧 [email protected] | 📞 (713) 205-2455
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