What multiple do small businesses sell for?

Short answer

Most small businesses sell for 2–4× seller's discretionary earnings, or 3–6× EBITDA once earnings pass roughly $1M. Recurring-revenue and low-owner-dependence businesses trade at the top of the range; owner-dependent service businesses and restaurants trade at the bottom.

Typical sale multiples by business profile

Business profile	Multiple	Basis
Owner-operated service, under $250K SDE	1.8×–2.8×	SDE
Established trades / contracting	2.5×–3.8×	SDE
Ecommerce brand, stable 3 years	2.8×–4.2×	SDE
Managed business, $1M+ EBITDA	3.5×–6×	EBITDA
B2B SaaS, sub-$5M ARR	3×–7×	ARR
Restaurant, single location	1.5×–2.5×	SDE

How to read this table

B2B SaaS, sub-$5M ARR sits at the top of the table (3×–7×) — arr. If your situation looks like this row, plan against the upper half of the range rather than the midpoint.
Restaurant, single location anchors the bottom (1.5×–2.5×) — sde. Treat this as the conservative case you should still be profitable at.
The gap between the top and bottom row is roughly 4.7×. That spread is why a single blended average is close to useless here — pick the row that matches your setup instead of averaging the column.
Most rows are ranges, not single figures. The low end usually reflects a weaker month, a softer audience geography, or an unoptimised setup; the high end reflects a well-run, well-targeted operation of the same size.
With 6 reference points in the "typical sale multiples by business profile" table, the fastest way to use this page is to find the closest row, take its multiple, then stress-test it ±30% before you build a plan on it.

Context

The multiple is a summary of risk, not a market price. Three things move it more than anything else: how much of the revenue recurs, how replaceable the owner is, and how concentrated the customer base is. A business where the top client is 40% of revenue is discounted heavily no matter how good the margin looks. Clean, reviewed financials add real multiple on their own, because a buyer paying 3× is buying the reliability of the earnings figure as much as the figure itself.

What moves this number

Owner compensation treatment

Whether the owner's pay sits above or below the profit line changes reported margin by 10–20 points on identical economics. Normalise to seller's discretionary earnings before comparing anything.

Fixed cost base

Rent, insurance and salaried staff set the break-even point. A business with a low fixed base survives a soft quarter that would close a heavily-loaded competitor.

Customer concentration

When the top client exceeds a quarter of revenue, both cash flow and sale value are discounted. Diversification is worth real margin.

Cash conversion cycle

Days of inventory plus receivables minus payables decides how much working capital the business needs to fund the same revenue.

Methodology

Broker-reported closed-transaction multiples across main-street and lower-middle-market segments, mapped to the risk adjustments used in the RevenueLab business acquisition valuation calculator.

Assumptions and caveats

Figures are pre-tax and assume the owner is paid a market-rate salary unless a row says otherwise.
Sector benchmarks hide wide local variation in rent, wages and demand.
This page was last reviewed on 2026-08-12. Ranges are updated as new data lands, so re-check before using them in a contract or a plan.
Use these numbers as a starting range, not a guarantee — your own historical data always beats a benchmark.

Frequently asked questions