21 Apr Feast or Famine? Navigating the Market for Niche B2B Service Businesses
Q&A with David & Jay
Question:
I am seeing niche B2B service companies come to me for advice lately. What does the market for these companies look like?
Answer:
Niche B2B services & B2B business valuation – In short: It tends to be feast or famine. These businesses primarily sell their services to other businesses, often stepping in when large corporations need to outsource non-core services.
The Feast: When demand is strong, revenue and profits roll in.
The Famine: When market focus shifts, the impact can hit hard. This is especially true for companies that require a heavy, ongoing annual investment in equipment or training. Because of this volatility, valuation multiples can vary wildly. Your company’s value will depend heavily on:
Growth trajectory
- Customer concentration: (How much of your revenue is tied to just a few clients?)
- Customer industry: (Is the industry you serve currently thriving or struggling?)
- Competitor behavior: When demand slows, competitors will often drop their prices to maintain revenue, which can hurt everyone in the industry.
The Takeaway:
Niche B2B services can be incredibly lucrative, but they are highly sensitive to market shifts. Protect your valuation by planning for the famine while you’re still in the feast.
During the 2025 Managing and Accounting Practice (MAP) Conference hosted by the Massachusetts Society of CPAs (MassCPAs), Beacon Equity Advisors’ David Humphrey and Jay Galasso presented an AMA (Ask Me Anything) to the CPA firm partners attending. In this Q&A series, Beacon publishes some of those questions to help business owners make important decisions about the future of their company.