Top 5 Industries to Buy in 2025: Market Data & Strategy

As we move deeper into 2025, the business acquisition landscape is evolving rapidly, shaped by market forces, buyer demand, and financial trends. For entrepreneurs, business buyers, and investors, staying informed about the most promising industries is critical to identifying opportunities and making sound decisions. Based on a recent analysis, five industries stand out in terms of growth potential, valuation trends, and buyer interest. This article explores these key sectors, highlights their unique characteristics, and provides actionable strategies for navigating today’s competitive market.

Why Industry Selection Matters in Business Acquisition

Choosing the right industry is one of the most important steps in buying a business. Each industry comes with its own set of challenges, opportunities, and valuation norms. For instance, some sectors are highly dependent on owner-operator involvement, while others offer opportunities for more scalable, absentee ownership. By understanding the competitive dynamics, financial metrics, and operational nuances of specific industries, buyers can position themselves for long-term success. Below, we break down the top five industries to consider in 2025, based on recent market data.

1. Home Services: The Steady Performer

Home service businesses continue to be a dominant force in the market, offering reliable cash flow and growth opportunities. These businesses, which include general maintenance, cleaning, and landscaping services (excluding HVAC), have seen steady demand as homeowners increasingly outsource tasks to professionals.

Key Stats:

• Average Asking Price: $697,000
• Average SDE Multiple: 3.3x
• Market Supply: 737 active listings

Why Home Services Are Attractive

The home services sector benefits from consistent demand and low barriers to entry. It’s a particularly appealing option for first-time buyers, as many of these businesses are owner-operated and relatively easy to manage. However, success in this space often hinges on the buyer's ability to maintain strong customer relationships and ensure operational efficiency.

2. Construction: A Reliable Workhorse

With an average asking price of $1.56 million and a 3.1x SDE multiple, construction businesses remain a solid investment for acquisition-minded operators. There is a significant supply of these listings on the market, providing buyers with options to find well-established businesses.

Key Stats:

• Market Supply: 400 active listings
• Valuation Trends: Slightly lower multiples than home services

What Makes Construction Appealing

The construction industry is characterized by its resilience and scalability. From commercial projects to residential renovations, this sector offers diverse revenue streams. However, competition is fierce, and buyers should prioritize businesses with strong reputations and systems in place to handle future growth.

3. HVAC: The Rising Star of 2025

Heating, ventilation, and air conditioning (HVAC) businesses have emerged as a standout sector this year, with valuations surging to an average SDE multiple of 4.2x. This is a significant jump from previous years, reflecting the market’s confidence in this industry.

Key Stats:

• Average Asking Price: $1.8 million
• Market Supply: 270 active listings

Why HVAC Is Heating Up

The rising valuations in HVAC can be attributed to improved operational efficiency and higher profit margins. Many HVAC businesses now report net operating incomes of 17-18%, signaling strong financial performance. Additionally, with fewer listings available compared to other industries, competition among buyers is intense.

Buyer Tip: While prior experience in HVAC isn’t mandatory, buyers should have a clear plan for bridging the knowledge gap. Highlighting transferable management skills and securing endorsements from lenders can significantly boost your credibility.

4. Manufacturing: The Resilient Option

Manufacturing businesses remain an attractive choice for institutional investors and private equity groups due to their scalability and independence from owner-operator involvement.

Key Stats:

• Average Asking Price: Not specified, but higher than service-based industries
• Market Supply: 145 active listings

The Advantages of Manufacturing

Unlike service businesses, manufacturing companies are primarily product-driven, making them less dependent on the owner’s day-to-day presence. This scalability makes them ideal for buyers seeking to grow through systematization and remote management.

Buyer Tip: Manufacturing businesses often trade at higher multiples because of their appeal to professional investors. Buyers should conduct thorough due diligence to ensure the business has scalable production capabilities and a strong product-market fit.

5. Retail: A Challenging Landscape for First-Time Buyers

While retail businesses rank among the top five industries by market activity, they pose unique challenges, particularly for first-time buyers.

Key Stats:

• Average Asking Price: $492,000
• Average SDE Multiple: 3.1x
• Market Supply: 400 active listings

Why Buyers Should Be Cautious with Retail

The retail sector is highly dependent on location and foot traffic, making it vulnerable to external factors like rising rents and changing consumer behavior. Additionally, competition from e-commerce continues to disrupt traditional retail models. While opportunities exist, buyers should approach this sector with caution and focus on businesses with diversified revenue streams or unique value propositions.

Understanding the Overall Market

Across all five industries, the average asking price for businesses on the market sits at approximately $900,000, highlighting their accessibility for Main Street and lower-middle-market buyers. However, competition is fierce, with 15 qualified buyers vying for every quality listing. Notably, only 20% of listed businesses ultimately close, underscoring the importance of preparation and strategic positioning.

Top States for Business Purchases

The most active states for business acquisitions in 2025 are:

1. California
2. Texas
3. Illinois
4. Florida
5. Tennessee

Buyers in these states should be prepared for heightened competition, as these regions consistently receive the highest number of inquiries.

Key Takeaways

• Home Services: A strong option for first-time buyers due to consistent demand and manageable operations.
• Construction: Offers scalability and reliability, but requires diligence to identify reputable businesses.
• HVAC: The hottest industry in 2025, with rising valuations and strong profit margins.
• Manufacturing: Ideal for buyers seeking scalable, non-owner-dependent businesses.
• Retail: A risky choice for beginners due to high overheads and market volatility.
• Competitive Landscape: With 15 buyers per listing and only 10% of buyers closing deals, preparation is critical.
• Geographical Focus: California, Texas, and Florida lead the way in acquisition activity.

Actionable Strategies for Buyers

1. Develop a Competitive Buyer Profile: Stand out by showcasing your management experience, financial readiness, and strategic fit for the business.
2. Build Relationships with Brokers: Establishing trust with brokers can give you an edge in accessing quality listings.
3. Focus on Financial Due Diligence: Ensure businesses have clean financials, including verified tax returns. Avoid deals based on interim statements only.
4. Leverage Industry Trends: Align your acquisition strategy with sectors experiencing growth, such as HVAC and manufacturing.
5. Avoid Common Pitfalls: Steer clear of industries like retail unless you have a clear plan for overcoming challenges like high fixed costs and fluctuating demand.

Conclusion

The business acquisition market in 2025 presents a wealth of opportunities, particularly in industries like HVAC, home services, and manufacturing. However, success requires more than just identifying the right deal - it demands careful preparation, sound financial judgment, and strategic execution. By understanding the trends shaping today’s market and leveraging the insights shared here, buyers can position themselves to thrive in their entrepreneurial journey.

Source: "Top 5 Industries to Buy a Business in 2025 (Insider Market Report)" - Leo Landaverde, YouTube, Jan 1, 1970 - https://www.youtube.com/watch?v=YcCqJyADSCA

Use: Embedded for reference. Brief quotes used for commentary/review.