Business Valuation Multiples by Industry

Quick answer

A valuation multiple is the number you multiply your earnings by to estimate your business’s value. Small businesses commonly sell for about 2 to 4 times SDE, with an average near 2.5 times, while larger businesses are valued on EBITDA at roughly 4 to 9 times. The exact multiple depends on your industry, your size, and how risky the business looks to a buyer.

Key takeaways

• A multiple turns yearly earnings into an estimated business value.
• Smaller businesses use SDE multiples; larger businesses use EBITDA multiples.
• Industry sets the rough band, but your specific business decides where you land in it.
• Deal size is one of the biggest factors: bigger businesses earn higher multiples.
• The ranges below are general market data; only a real valuation gives your true number.

What is a valuation multiple?

A valuation multiple is simply a shortcut. Instead of projecting decades of future profit, the market settles on a number that reflects what buyers will pay for each dollar of earnings in your industry. Multiply your earnings by that number and you have an estimated value. For example, a business with $300,000 in SDE and a 3 times multiple is worth roughly $900,000. To choose the right earnings figure first, see SDE vs EBITDA.

SDE multiples vs EBITDA multiples

Which multiple applies depends on how your business is measured. Smaller, owner-operated businesses are valued on SDE, and their multiples are lower because the owner is part of the engine. Larger businesses are valued on EBITDA, and their multiples are higher because they are more stable, more systematized, and easier to step into.

As a general guide based on recent market data:

• Small businesses on SDE: commonly about 2 to 4 times, with an overall average near 2.5 times.
• Lower middle market on EBITDA: roughly 4 to 9 times, depending on industry and quality.
• Larger middle-market businesses: often 6 to 10 times or more, thanks to scale and systems.

General ranges by industry

The table below shows general 2026 ranges to give you a sense of where different sectors tend to land. Treat them as a starting point, not a quote. Your own multiple can sit above or below these bands depending on your specific business.

Note: Main Street businesses are more often quoted on SDE (about 2 to 4 times) than on EBITDA. These figures reflect general market data for 2026 and vary widely by region, size, and business quality.

Why two businesses in the same industry sell for different multiples

Industry sets the band, but the business sets the position within it. The same value drivers that affect every sale decide whether you are at the top or bottom of your range:

• Size. Deal size is one of the single biggest factors. A larger business in the same industry almost always earns a higher multiple.
• Owner dependence. A business that runs without the owner is worth a premium.
• Recurring revenue. Predictable, contracted income lifts the multiple; one-off sales lower it.
• Customer concentration. Relying on one or two big clients pulls the multiple down.
• Margins and growth. Strong, growing margins, with a cash-flow margin around 20% or better, push toward the top of the range.
• Clean financials and systems. Documented operations reduce risk and reward you with a higher number.

How to find your real multiple

A published range cannot tell you your number, because it cannot see your books, your customers, or your systems. A professional valuation can. Bridge builds valuations using a Comparable Companies and Transactions analysis, applying the multiples from real, recent deals that match your business, then presents the result as a range with a confidence level. A certified valuation is a flat $1,999, delivered in 3 to 5 business days, and accepted by banks, buyers, and courts. If you just want a quick read, start with a free estimate.

If your multiple is lower than you would like, the value drivers above are your to-do list. Bridge can help you raise your value before you sell.

Frequently asked questions

What is a business valuation multiple?

It is the number you multiply your earnings by to estimate value. For example, $300,000 in SDE at a 3 times multiple suggests a value near $900,000.

What is a good multiple for a small business?

Small businesses commonly sell for about 2 to 4 times SDE, with an average near 2.5 times. Larger businesses valued on EBITDA often see 4 to 9 times or more.

Why do multiples vary by industry?

Different industries carry different levels of risk, growth, and demand. Stable sectors with recurring revenue, like healthcare and technology, earn higher multiples than thin-margin, owner-dependent sectors.

What raises my multiple the most?

Reducing owner dependence, building recurring revenue, diversifying customers, and keeping clean financials. See how to value a small business for the full picture.

How do I find the exact multiple for my business?

Published ranges are only a guide. A certified valuation uses real comparable sales to determine the multiple that actually applies to your business.

Find the multiple that applies to your business

Stop guessing with industry averages. Get a free estimate, or order a certified valuation grounded in real comparable sales.

About Bridge. Bridge helps small business owners value, scale, and exit with confidence. Certified valuations are prepared by ABV and AICPA credentialed experts, delivered for a flat $1,999 in 3 to 5 business days, and are SBA-compliant. The team has served 300+ businesses and supported more than $1B in M&A transactions. Learn more at bridge.financial.

This article is educational and not financial, legal, or tax advice. For a number specific to your business, request a certified valuation.