What Multiple Does My Business Sell For? How to Estimate Yours

What multiple does my business sell for depends on your business model, size, growth rate, and margins, but most privately held US businesses trade somewhere between 2x and 6x their annual earnings, with software and high-growth companies reaching higher. Businesses under about 1 million USD in earnings typically sell on a 2x to 4x SDE multiple, while companies above 3 million USD in EBITDA more often land in the 5x to 8x range. The multiple is not a fixed number for your industry; it is a starting point that moves up or down with the strength of your business.

Last updated July 2026.

What a valuation multiple actually is

A multiple is the number you multiply your earnings or revenue by to arrive at a price. If a buyer pays 4x SDE for a business earning 200,000 USD in seller's discretionary earnings, the price is 800,000 USD. The multiple bundles a buyer's judgment about risk and growth into a single figure: a higher multiple means the buyer sees durable, low-risk, growing profit, while a lower multiple prices in fragility or decline.

Two businesses in the same industry with identical earnings can sell for very different amounts because their multiples differ. That is why "what multiple does my business sell for" is really a question about the quality of your business, not just its sector.

Typical multiple ranges by model

As a rough orientation, private businesses tend to fall in these bands:

Pick the right earnings base first, because SDE and EBITDA carry different multiples and applying one multiple to the wrong base gives a misleading answer. Work out your earnings with our guide to how to calculate SDE, then run either base cleanly with the SDE multiple or EBITDA multiple valuation method rather than guessing.

What pushes your multiple up

Buyers pay above the sector average when the business is easy to own and likely to keep growing. The factors that lift a multiple most:

• Growth. A business growing 30 percent a year earns a premium over a flat one, because the buyer is really buying future earnings.
• Recurring revenue. Contracted, repeat revenue is worth more than one-time project work, which is why subscription models command the highest multiples.
• Low owner dependence. A business that runs without the founder in the room is far more sellable and less risky.
• Healthy, stable margins. Strong margins signal pricing power and operational control.
• Diversified customers. No single client accounting for a large share of revenue removes a major risk discount.

What pulls your multiple down

The same list in reverse drags the number below the average. Heavy customer concentration, declining or lumpy revenue, thin margins, a founder who is the business, messy books, or a shrinking market all push a buyer to offer a lower multiple. These are the value drivers of a business, and understanding yours is the difference between a defensible number and a hopeful one.

How to estimate your own multiple

Move from the sector average to your specific number in three steps. Start with the typical range for your model. Adjust it up or down for your growth, revenue quality, and owner dependence. Then cross-check the result against real comparable sales in your size band, since businesses that recently changed hands are the best evidence of what buyers actually pay. When a discounted cash flow view, explained in DCF valuation, points to a similar figure, you can trust the multiple; when the methods scatter, one of them is catching something the multiple missed.

Always express it as a range

No honest answer to "what multiple does my business sell for" is a single number. A business earning 200,000 USD in SDE at a 3x to 4x range implies roughly 600,000 to 800,000 USD, and where it lands depends on the drivers above and on the buyer across the table. Reporting a range keeps expectations realistic and gives you a target to work toward before a sale. If you want to move toward the top of your range, the levers in increasing business value before selling show how.

Why bigger businesses sell for higher multiples

Size is the single most reliable predictor of multiple, and owners consistently underestimate how strong the effect is. The same business earning three times as much does not sell for three times the price, it sells for more than that, because larger companies attract a deeper buyer pool. Below roughly 500,000 USD in earnings the buyer is an individual using an SBA loan and their own savings. Above 3 million USD in EBITDA, private equity and strategic acquirers enter, they finance with cheaper capital, and they bid against each other.

This is why the gap between a 900,000 USD business and a 1.2 million USD business is often much wider than the extra 300,000 USD of profit suggests. Crossing a size threshold changes who is bidding. It is also why growing earnings for another year before listing can pay for itself several times over, a point covered in how long it takes to sell a business.

What is a good multiple to sell a business for?

A good multiple is one at or above the median for your size band and industry, which for most US small businesses means 3x SDE or better, and for lower middle market companies means 5x EBITDA or better. Anything above that generally reflects recurring revenue, low owner dependence, and documented growth rather than a generous buyer.

Judging your offer against the sector average alone is a mistake, because averages mix a well-run business with clean books against a struggling one with customer concentration. Compare against businesses of your size, in your industry, with your growth profile, using real comparable sales rather than headline figures.

How many times profit is a business worth?

Most small businesses are worth 2 to 4 times their seller's discretionary earnings, and most mid-sized companies 4 to 7 times EBITDA. The word profit is the trap here: net income on a tax return is not the figure buyers use, because it is deliberately minimized. Buyers value normalized earnings after adding back owner compensation and one-time costs.

That normalization step routinely moves a valuation by six figures. A business showing 90,000 USD of net income may carry 260,000 USD of SDE once the owner salary, personal vehicle, health insurance, and a one-time legal settlement are added back. Work through it with how to calculate SDE before you apply any multiple, and see SDE vs EBITDA for which base fits your size.

Do you multiply revenue or profit to value a business?

Value profit, not revenue, in almost every case. Revenue multiples are used mainly for software companies, high-growth businesses, and companies that are not yet profitable, where earnings do not yet reflect the value of the customer base. For an established, profitable business, a revenue multiple ignores margin, which is the difference between a good business and a busy one.

Two agencies each billing 3 million USD are not worth the same amount if one keeps 600,000 USD and the other keeps 150,000 USD. If a revenue multiple genuinely fits your situation, the revenue multiple method explains where it holds up and where it misleads.

How do I find the multiple for my specific industry?

Start with recorded transactions rather than opinion. The most useful US sources are broker transaction databases, industry association benchmark reports, and the closed-deal comparables a valuation tool pulls. Then adjust the median for your own size, growth, and revenue quality, since a published industry average is a midpoint across businesses far better and far worse than yours.

Sector medians are a starting point, not an answer. Our breakdown of business sale multiples by industry lists the ranges sector by sector, and the rule of thumb business valuation methods some industries use, such as a per-seat or per-route formula, show where the shortcuts still apply.

Estimate, not appraisal

An estimated multiple is educational, useful for orientation and negotiation, but never a certified appraisal. A formal valuation for legal, tax, or lending needs should come from a credentialed appraiser who can issue a defensible signed report.

Businessappraisal estimates your multiple from your normalized earnings, refines it with a discounted cash flow and comparable sales, and explains which drivers moved your number, returning an educational estimate as a range in minutes. See how business valuation works.