Average Business Sale Multiple by Industry: Benchmarks for 2026

Average business sale multiples vary widely by industry, from roughly 4x to 6x annual recurring revenue for healthy SaaS down to about 2x to 3x SDE for restaurants and agencies. Multiples reflect how buyers price risk and durability in each sector, so the same earnings can be worth very different amounts depending on the trade. The table below gives typical ranges by industry and model, followed by the factors that move a business up or down within its band. Treat every figure as a benchmark for an estimate, not a guarantee of what any single business will sell for.

Last updated July 2026.

Multiples by industry and model

The expanded reference below covers the sectors owners ask about most. Every figure is a typical range for a healthy, well-documented business of ordinary size in that sector, drawn from how US brokers and buyers price these trades. A business with unusual growth, contracted revenue, or heavy customer concentration can sit well outside its band, so read the range as a starting point and adjust from there.

The pattern running through the whole table is contracted revenue. Every sector at the top of its neighborhood, insurance renewals, MSP contracts, pest control routes, SaaS subscriptions, is one where the revenue arrives again next month without being resold. That single characteristic explains more of the spread than the industry label does.

Why software leads and restaurants trail

The spread between the top and bottom of this list is not arbitrary. Software earns its higher multiples through recurring, contracted revenue that scales without proportional cost, which buyers view as low-risk and durable. Restaurants sit lower because they carry thin margins, high fixed costs, local demand, and heavy owner involvement, all of which raise perceived risk. Everything in between reflects some blend of margin, recurrence, capital intensity, and how easily the business runs without its founder.

Size lifts the multiple

Within any industry, larger businesses command higher multiples than smaller ones. A manufacturer earning 500,000 USD in EBITDA might trade near the bottom of the 3x to 5x range, while one earning 5 million USD could reach the top or beyond. Buyers pay a premium for scale because larger firms tend to have management teams, diversified customers, and better access to financing. This is why a small business is often valued on SDE at a lower multiple, while a larger version of the same business shifts to an EBITDA multiple valuation at a higher one.

What moves a business within its band

Two businesses in the same industry rarely sell for the same multiple. The factors that decide where you land inside your range include:

• Revenue quality. Recurring or contracted revenue beats one-time or project revenue.
• Growth. Rising earnings pull the multiple up; flat or falling earnings pull it down.
• Margins. Higher and more stable margins signal pricing power.
• Customer concentration. A business leaning on one big client trades at a discount.
• Owner dependence. Documented systems and a capable team raise the multiple.
• Clean financials. Books that survive due diligence protect the price.

Using multiples correctly

An industry multiple is a starting point, not the finish line. To turn it into an estimate, apply it to your normalized earnings, then sanity-check the result against real comparable sales in your size band. A revenue multiple, an SDE multiple, or an EBITDA multiple each answers a slightly different question, so choose the one buyers in your sector actually use. For software, the revenue multiple is the natural fit; for most small businesses, the SDE multiple is.

Cross-check with cash flow

Multiples reflect what the market pays, but they do not directly measure the cash a business produces. Pairing a multiple estimate with a discounted cash flow view, covered in DCF valuation, gives a second opinion grounded in future earnings rather than sector averages. When the multiple view and the cash flow view agree, you can hold your estimate with more confidence. When they diverge, the gap tells you which assumptions to examine.

What industry has the highest business sale multiple?

Software and healthcare services command the highest multiples, with healthy SaaS reaching 3x to 8x revenue and veterinary or medical practices reaching 5x to 9x EBITDA in consolidator-driven markets. Both share the same traits: recurring or repeat revenue, high margins, strong demand from well-funded acquirers, and business value that does not walk out the door with the founder.

Restaurants, general retail, and construction contracting sit at the other end, usually 1.5x to 4x. The revenue has to be won again every single day, margins are thin, and much of what makes the business work is the owner or the specific location. If you run one of these, the leverage is in the specific improvements covered in increasing business value before selling, not in waiting for your sector to reprice.

What is a typical EBITDA multiple for a small business?

Small businesses with 1 million to 3 million USD in EBITDA typically sell for 4x to 6x, and companies above 3 million USD in EBITDA often reach 5x to 8x or higher. Below roughly 1 million USD in earnings, buyers usually switch to an SDE multiple of 2x to 4x instead, because owner compensation dominates the profit figure at that size.

Applying an EBITDA multiple to an SDE figure is the most common valuation error owners make, and it inflates the answer by a wide margin. The two bases are not interchangeable: SDE includes the owner salary that EBITDA subtracts. Our comparison of SDE vs EBITDA shows which to use at your size, and the EBITDA multiple method walks through the calculation.

Why do recurring revenue businesses sell for more?

Recurring revenue lowers the buyer's risk, and multiples are fundamentally a price on risk. A buyer purchasing 1 million USD of contracted subscription revenue knows roughly what next year looks like. A buyer purchasing 1 million USD of project revenue is buying a sales team's ability to repeat last year, which is a much less certain bet, so they pay less for it.

The effect is large enough to be worth engineering deliberately. Converting even a third of a service business to maintenance agreements or retainers can move a multiple by a full turn, which on 500,000 USD of earnings is 500,000 USD of enterprise value. The mechanics of that shift are covered in valuing a business with recurring revenue, and the underlying factors in our value drivers breakdown.

These are estimates, not promises

Industry averages describe a wide population, and your business is one data point within it. The ranges here support an educational estimate expressed as a spread, not a prediction of a final sale price. A formal valuation for legal, tax, or lending purposes should come from a credentialed appraiser who can issue a defensible signed report.

Businessappraisal matches your business to the right measure and industry benchmark, applies it alongside a discounted cash flow, and grounds the result in comparable sales, then explains the drivers behind your number. The output is an educational estimate as a range, in minutes. See how business valuation works.