SDE Multiples by Industry: 2026 SDE Multiplier Benchmarks and Average SDE Multiple by Sector
What US small businesses actually closed at, sector by sector, from broker-reported transactions. Then apply the multiple to your own earnings and see the range it implies.
Estimated business value
Method breakdown
What moves this number
Estimate, not a certified appraisal. Your figures are not stored.
In short
SDE multiples by industry average roughly 2.5x across more than 9,500 US small business sales, and most sectors close between 2x and 3.5x. The top of the table is marinas at 6.60x, rubber and plastic manufacturing at 5.11x, car washes at 4.73x, and storage facilities at 4.60x. The bottom is distribution routes at 1.51x, cell phone repair at 1.78x, and jewelry stores at 1.86x. Sell-side advisors quote higher ranges than these because they describe the premium end of each sector, not the median. Below roughly $1M of earnings almost every US buyer quotes SDE rather than EBITDA.
The market
What the average SDE multiple actually is
Every number on this page comes from businesses that changed hands, not from asking prices. That distinction matters more than it sounds. Listings are priced by hope and closed deals are priced by what a buyer could finance, and the gap between the two is routinely a full turn of earnings.
2.5x
All-industry average
Across roughly 9,500 US sales in 2025
2.7x
Average cash flow multiple
BizBuySell, Q1 2026
$350,000
Median sale price
BizBuySell, Q1 2026
$165,256
Median cash flow
The SDE the multiple is applied to
Read those together and the median US small business that sold in early 2026 generated about $165,000 of owner earnings and traded for about $350,000. That is the market most owners searching for a multiple are actually in, and it is a long way from the numbers quoted in mid-market M&A coverage. If your earnings are above roughly $1M, the relevant benchmark is on our EBITDA multiples by industry page instead.
The data
SDE multiples by industry, from closed US transactions
These are median SDE multiples for 105 US small business sectors, drawn from broker-reported closed sales. Find your row, then read the two sections below it before you trust the number, because the median describes a typical business in that sector and yours is probably not typical in at least one direction.
Service businesses
| Industry | Median SDE multiple |
|---|---|
| Medical billing | 4.41x |
| Funeral homes | 4.36x |
| Laundromats | 4.12x |
| Commercial laundry | 3.21x |
| Waste management and recycling | 3.20x |
| Security businesses | 2.92x |
| Architecture and engineering | 2.82x |
| Property management | 2.72x |
| Catering | 2.63x |
| Landscaping and yard service | 2.56x |
| Staffing agencies | 2.43x |
| Pest control | 2.35x |
| Cleaning businesses | 2.30x |
| Dry cleaners | 2.20x |
| Locksmith | 2.14x |
| Legal services and law firms | 1.87x |
Building and construction
| Industry | Median SDE multiple |
|---|---|
| Building material and hardware stores | 3.40x |
| Concrete | 3.04x |
| Heavy construction | 2.98x |
| Electrical and mechanical contracting | 2.94x |
| HVAC | 2.80x |
| Plumbing | 2.62x |
| Other construction | 2.56x |
Manufacturing
| Industry | Median SDE multiple |
|---|---|
| Rubber and plastic products | 5.11x |
| Industrial and commercial machinery | 4.20x |
| Machine shops and tool | 3.72x |
| Metal products | 3.70x |
| Energy and petroleum | 3.36x |
| Medical devices and products | 3.25x |
| Chemical and related products | 3.19x |
| Auto, boat and aircraft | 3.18x |
| Glass, stone and concrete | 3.17x |
| Electronic and electrical equipment | 3.15x |
| Food and related products | 2.86x |
| Lumber and wood products | 2.84x |
| Sign manufacturers | 2.77x |
| Furniture and fixtures | 2.75x |
| Clothing and fabric | 2.51x |
| Paper and printing | 2.49x |
| Packaging | 2.37x |
Automotive and marine
| Industry | Median SDE multiple |
|---|---|
| Car washes | 4.73x |
| Gas stations | 3.70x |
| Equipment rental and dealers | 3.55x |
| Towing companies | 3.44x |
| Marine and boat services | 3.31x |
| Auto repair and service | 2.70x |
| Car dealerships | 2.32x |
Retail
| Industry | Median SDE multiple |
|---|---|
| Nursery and garden centers | 4.15x |
| Liquor stores | 3.41x |
| Grocery stores and supermarkets | 3.38x |
| Health food and nutrition | 3.08x |
| Furniture and furnishings stores | 2.96x |
| Pharmacies | 2.95x |
| Convenience stores | 2.82x |
| Pet stores and supplies | 2.69x |
| Bike shops | 2.53x |
| Vending machines | 2.24x |
| Clothing and accessories | 2.22x |
| Smoke shops | 2.14x |
| Flower shops | 2.05x |
| Jewelry stores | 1.86x |
Health care and fitness
| Industry | Median SDE multiple |
|---|---|
| Dental practices | 3.28x |
| Assisted living and nursing homes | 3.18x |
| Home health care | 2.84x |
| Medical practices | 2.58x |
| Gyms and fitness centers | 2.44x |
| Dance, Pilates and yoga studios | 2.19x |
Food and restaurants
| Industry | Median SDE multiple |
|---|---|
| Bars, pubs and taverns | 2.86x |
| Food trucks | 2.77x |
| Bakeries | 2.68x |
| Ice cream and frozen yogurt | 2.53x |
| Donut shops | 2.45x |
| Coffee shops and cafes | 2.28x |
| Restaurants | 2.26x |
| Juice bars | 2.09x |
| Breweries | 1.97x |
Online and technology
| Industry | Median SDE multiple |
|---|---|
| Software and app companies | 3.41x |
| Websites and ecommerce | 3.33x |
| IT and software services | 2.99x |
| Graphic and web design | 2.45x |
| Cell phone and computer repair | 1.78x |
Everything else
| Industry | Median SDE multiple |
|---|---|
| Marinas and fishing | 6.60x |
| Storage facilities and warehouses | 4.60x |
| Dog daycare and boarding | 4.40x |
| Hotels | 4.02x |
| Nightclubs and theaters | 3.83x |
| Other financial services | 3.41x |
| Day care and child care | 3.40x |
| Preschools | 3.22x |
| Trucking companies | 3.11x |
| Campgrounds and RV parks | 3.07x |
| Schools | 2.98x |
| Moving and shipping | 2.86x |
| Insurance agencies | 2.68x |
| Limo and passenger transport | 2.61x |
| Other pet services | 2.53x |
| Other entertainment | 2.48x |
| Massage businesses | 2.44x |
| Tanning salons | 2.42x |
| Accounting and tax practices | 2.33x |
| Hair salons and barber shops | 2.18x |
| Pet grooming | 2.15x |
| Spas | 2.12x |
| Nail salons | 1.88x |
| Distribution routes | 1.51x |
Median SDE multiples from BizBuySell broker-reported closed US transactions, as compiled by Sundance Financial across roughly 9,500 2025 sales. Last updated August 2026.
Several of these sectors have a dedicated page with the size bands and the drivers behind the number, including laundromat valuation, car wash valuation, landscaping business valuation, HVAC business valuation, restaurant valuation, trucking company valuation, self storage valuation, and gas station valuation.
Read this before you quote a number
Advisor ranges and closed medians describe different businesses
Search for an SDE multiple in any sector and you will find two sets of numbers that do not agree. A sell-side advisor will tell you HVAC trades at 3x to 5x. The closed-transaction median for HVAC is 2.80x. Neither party is lying. They are describing different populations, and knowing which population you belong to is most of the work.
| Sector | Closed median | Advisor range | What explains the gap |
|---|---|---|---|
| HVAC | 2.80x | 3x to 5x | Advisor range covers commercial service-contract books; the median covers every owner-operator van shop that sold. |
| Plumbing | 2.62x | 2.5x to 4.5x | Recurring service agreements sit at the top of the advisor range and are rare in the median sample. |
| Dental practices | 3.28x | 4x to 6x | DSO buyers pay the high end for multi-operatory practices with associates; solo practices anchor the median. |
| Pest control | 2.35x | 3x to 5x | Route density and contract share drive the gap. Consolidators buy routes, not one-truck operations. |
| Staffing and recruiting | 2.43x | 2x to 4x | Permanent placement sits low, long-term contract staffing high. The median blends both. |
| Restaurants | 2.26x | 1.5x to 3x | The two sources broadly agree here, which is itself informative. Nobody is paying a premium for single-unit dining. |
The pattern holds across every sector where the two disagree. Advisor ranges are built from engagements advisors take on, and they take on the businesses worth taking to market: bigger, cleaner, with contracts and a manager. Closed medians include every owner-operator who listed with a local broker and sold. If your business looks like the first description, the advisor range is the honest benchmark for you. If it looks like the second, the median is.
Closed medians: BizBuySell broker-reported sales. Advisor ranges: CT Acquisitions 2026 sector guidance. Both reported as published.
The structural ceiling
Why so few Main Street sectors clear 4x SDE
Look down the table and you will notice how few sectors clear 4x, and that only a handful clear 4.5x. That is not sentiment. It is arithmetic imposed by how these deals get financed. The buyer of a sub-$5M US business is usually an individual using an SBA 7(a) loan, and that loan has to service itself out of the same earnings being purchased. Run the amortization at a 10-year term and current pricing and the coverage test caps an SBA-financed purchase somewhere around 3.5x to 4.5x SDE, tightening toward 3x once a lender reserves for capital expenditure or stresses the rate. Almost the entire table sits below that ceiling for a reason.
The loan is capped
SBA 7(a) tops out at $5M. Above roughly $6M of purchase price the individual buyer pool thins dramatically, and with it the competitive bidding that lifts multiples.
The coverage test binds
The SBA floor is a 1.15x debt service coverage ratio and most lenders underwrite to 1.25x or better. Once the multiple climbs past roughly 4x SDE, annual debt service consumes too much of the earnings and the loan fails the test. Reserve for capital expenditure or stress the rate and that ceiling drops toward 3x.
The buyer still needs a salary
The purchaser is buying a job as well as an asset. After debt service they need to live on what remains, which sets a practical ceiling well before the lender says no.
The practical consequence is worth stating plainly, because it changes what a seller should do. If your business is worth more than about 4.5x SDE, the extra value will not come from a better-negotiated SBA deal. It comes from reaching a different buyer: a cash purchaser, a strategic acquirer already in your sector, or a private equity platform that prices on EBITDA. Getting there usually means growing earnings past the point where the institutional buyer pool takes an interest, which is the argument for increasing business value before selling rather than listing now and negotiating hard.
Which metric applies
Where SDE stops and EBITDA takes over
Using the wrong earnings base is the most expensive mistake on this page, because SDE and EBITDA are not interchangeable and their multiples are not comparable. SDE adds a full owner salary and the owner personal benefits back into earnings. EBITDA does not. On identical financials SDE is the bigger number, so an SDE multiple will always look lower than an EBITDA multiple for the same business. Comparing your 2.8x SDE against a headline 6x EBITDA tells you nothing at all.
| Normalized earnings | Metric buyers quote | Who the buyer is | What to do |
|---|---|---|---|
| Under $750K | SDE only | Individual owner-operator, usually SBA financed | Use the sector table above and nothing else |
| $750K to $1.5M | Both, presented side by side | Individuals, search funds, small sponsors | Present both figures to widen the buyer pool |
| $1.5M to $2M | EBITDA dominant | Lower middle market private equity platforms | Expect roughly one to two turns above the SDE view |
| Above $2M | EBITDA only | Institutional buyers and strategic acquirers | The SDE table no longer describes your market |
The overlap band is where sellers leave money behind. A business at $900,000 of earnings presented only as SDE attracts individual buyers priced at 3x. The same business presented with a defensible EBITDA figure also reaches small sponsors who price a turn or two higher. Working through the definitions in SDE vs EBITDA and how to calculate SDE is worth the hour it takes.
Within your sector
Six things that decide where in the range you land
The sector sets the starting point. These six factors decide whether you close half a turn above the median or a full turn below it, and between them they account for more of the final price than the industry you happen to be in.
Recurring or contracted revenue above 50 percent
The single largest within-sector premium. Contracted work is worth a 30 to 60 percent higher multiple than the same dollar of project revenue, because the buyer is purchasing a book rather than a reputation.
The owner is not the business
If the seller answers the phone, quotes the jobs, and holds the customer relationships, part of the earnings leaves at closing. Owner dependence is the most common reason a deal prices a full turn below the sector median.
Customer concentration under 20 percent
One client at 35 percent of revenue is a discount, not a footnote. Buyers underwrite the downside where that client leaves in year one.
Twenty-four months of clean monthly financials
Reconciled books on accrual basis with defensible add-backs survive diligence. Shoebox records get repriced during the quality of earnings review, not before the offer.
Second-tier management already in place
A general manager who stays is worth a real premium because it converts an owner-operator job into a business a passive buyer can own.
Assignable leases and contracts
A short or restrictive lease caps the multiple regardless of earnings, because the buyer cannot finance a location they may lose.
Every one of these is something a buyer will test during diligence, and most of them take twelve to twenty-four months to fix. That is the honest timeline for moving your multiple, and it is why the owners who get the best prices start preparing well before they list. Our page on business value drivers works through how each one is scored.
Questions
SDE multiple questions people actually ask
What is a good SDE multiple?
For a US small business, a good SDE multiple is anything at or above the closed median for your sector, which is roughly 2.5x across all industries. Under 2x usually signals owner dependence, declining revenue, or customer concentration. Above 4x generally requires contracted recurring revenue, real assets, or a strategic buyer. The sector matters less than the quality of the earnings.
What is the average SDE multiple for a small business?
The average is approximately 2.5x across more than 9,500 US small business transactions in 2025. BizBuySell recorded an average cash flow multiple of 2.7x in Q1 2026 on a median sale price of $350,000 and median cash flow of $165,256. Most Main Street businesses close somewhere between 2x and 3.5x.
How do you calculate the SDE multiple?
Divide the business sale price by its seller discretionary earnings. A business that sold for $875,000 with $325,000 of SDE traded at 2.69x. To value a business rather than analyze a past sale, run it the other way: take your SDE and multiply by the median for your sector, then adjust up or down for recurring revenue, owner dependence, and customer concentration.
What is the difference between SDE and EBITDA?
SDE adds one full owner salary and the owner personal benefits back into earnings; EBITDA does not. That makes SDE the larger number for the same business, so SDE multiples are always lower than EBITDA multiples on identical financials. SDE is used below roughly $1M of earnings, where the buyer will run the business themselves. EBITDA is used above it, where the buyer will hire a manager.
What industry has the highest SDE multiple?
Among closed US small business transactions, marinas and fishing operations led at 6.60x, followed by rubber and plastic manufacturing at 5.11x, car washes at 4.73x, storage facilities at 4.60x, and medical billing at 4.41x. The pattern is consistent: the top of the table is real assets, recurring revenue, or businesses that run without the owner on site.
How many times SDE is a business worth?
Most privately held US small businesses are worth 2x to 3.5x SDE. The all-industry average is about 2.5x. Businesses with meaningful equipment or real estate, contracted revenue, or absentee ownership reach 4x to 5x. Businesses that depend entirely on the owner, or that sit in thin-margin sectors like single-unit restaurants and general retail, sell at 1.5x to 2.5x.
Why do brokers quote SDE instead of EBITDA for small businesses?
Because the buyer of a $600,000 business is going to work in it. That buyer needs to know the total cash the business will generate for one working owner, which is exactly what SDE measures. EBITDA deliberately excludes the owner salary because it assumes a hired manager. For a business the owner runs personally, EBITDA understates the economic benefit the buyer actually receives.
Is a 3x SDE multiple good?
A 3x SDE multiple is above the all-industry average of about 2.5x, so for most sectors it is a good outcome. It also sits comfortably inside what SBA financing will support, since the coverage test caps an SBA-backed purchase around 3.5x to 4.5x SDE. Pushing past that ceiling usually means attracting a cash buyer or a strategic acquirer rather than an individual borrowing against the earnings being sold.
At what point does a business stop being valued on SDE?
The transition starts around $750,000 of earnings and is essentially complete above $2M. In the overlap band, sell-side advisors often present both figures, because SDE attracts individual buyers while EBITDA attracts private equity platforms that pay one to two turns higher. Above about $1.5M of normalized earnings, the institutional buyer pool prices on EBITDA and the SDE table stops applying.
Last updated August 2026
The valuation methods
Apply your sector multiple to your own SDE
Enter revenue, earnings, and growth. You get an estimated range from an SDE or EBITDA multiple, a revenue multiple, and a discounted cash flow, benchmarked against comparable sales, with the drivers that moved your multiple explained. An educational estimate, not a certified appraisal.