Business Valuation Multiples by Industry

Why there is no single multiple

Every business owner wants one number. The honest answer is a range, because two businesses in the same industry with the same revenue can be worth very different amounts depending on how clean the earnings are, how dependent the business is on the owner, and who is buying. A multiple is a shorthand that buyers and sellers use to translate a stream of earnings or revenue into a purchase price, and it only works as a starting point for negotiation, not a fixed price tag.

The ranges below reflect what we see in the current market as of September 2026. They move. When interest rates rise, buyers borrow at higher cost and multiples tend to compress. When private equity and strategic buyers are actively rolling up an industry, multiples on larger, well-run businesses tend to expand. Treat every range here as a snapshot, not a permanent rule.

Profit-based multiples: general small business

For most owner-operated small businesses without a specific industry pattern, buyers typically price the deal off seller's discretionary earnings, or SDE. SDE is roughly your pretax profit plus your own salary and benefits, plus one-time or non-business expenses added back. The typical range across general small business sales is 2.5 to 4x SDE, and most deals actually land in the tighter 2 to 4x SDE band.

Where you fall in that band depends on the same handful of factors covered later in this guide: how much of the revenue repeats without you chasing it down, how well the business runs if you disappear for a month, how concentrated the customer base is, and how well your books actually prove the earnings you claim. A business earning $300,000 in SDE with strong systems and diverse customers might get 4x. The same $300,000 with one customer at 40 percent of revenue and an owner who does all the selling might get 2.5x.

Profit-based multiples: home service trades

Home service trades are priced on EBITDA rather than SDE once they cross a certain size, because at scale the owner's personal labor becomes a smaller share of the story and buyers want to see management-adjusted profit. HVAC businesses typically trade at 3.5 to 7x EBITDA, but that range is really two different markets: shops under $1 million in EBITDA usually land at 3.5 to 5x, while larger operations over $2 million in EBITDA, especially ones attractive to consolidators, can command 6 to 7x.

Plumbing businesses run a somewhat tighter 3.5 to 5x EBITDA. Landscaping is similar, at 3.5 to 5x EBITDA, with recurring maintenance contracts pushing toward the top of the range and one-off installation work pulling toward the bottom. Roofing sits lower, at 3 to 4.5x EBITDA, because so much roofing revenue is storm-driven and insurance-claim work, which buyers discount since it is lumpy and not guaranteed to repeat.

Trucking and logistics businesses trade at 3 to 4.5x EBITDA, but the multiple is only half the picture. Buyers then adjust the price up or down for the trucks and trailers themselves and for any equipment debt or leases attached to them, so two trucking companies at the same EBITDA multiple can sell for very different total prices depending on their fleet and financing.

Profit-based multiples: healthcare and professional practices

Dental and medical practices are priced on adjusted profit after backing out a fair market-rate provider salary, not the owner's actual (often inflated) compensation. This matters because many practice owners pay themselves well above what it would cost to hire a replacement dentist or physician. Dental practices typically trade at 4.5 to 6x that adjusted profit figure. Medical practices run 4 to 6x adjusted profit, with the exact spot depending on specialty, payer mix, and whether the buyer needs to recruit a replacement provider.

Mortgage and title businesses trade at 3.5 to 5x EBITDA, a range that reflects how sensitive these businesses are to interest rate cycles and loan volume, which buyers factor into how much they will pay for a single year's earnings.

Profit-based multiples: restaurants and ecommerce

Restaurants are valued differently from most small businesses. Buyers typically pay 2 to 3x SDE plus the value of the kitchen equipment, furniture, and fixtures on top. The equipment add-on exists because restaurant equipment holds real resale and replacement value separate from the earnings stream, and sellers often overlook it when estimating what their restaurant is worth.

Ecommerce businesses trade at 2.5 to 3.5x SDE. The range tends to sit lower than general small business in part because ecommerce earnings can swing with ad platform changes, marketplace algorithm shifts, and supplier relationships that a new owner has to prove they can maintain.

Insurance agencies and wealth management firms

Whole insurance agencies, meaning the full book plus the operating business around it, typically sell for 6 to 10x EBITDA. Larger RIA (registered investment advisor) firms trade in the same 6 to 10x EBITDA range. These multiples sit well above general small business because these are highly recurring, fee- or commission-based revenue streams with sticky clients, which is exactly the kind of earnings quality buyers pay up for.

Revenue and commission-based multiples

Some businesses are valued on a revenue or commission basis instead of a profit basis, usually because the revenue itself is highly predictable and recurring, and because profit definitions vary too much between owners to compare cleanly. Insurance books of business are the clearest example. A property and casualty (P&C) book typically trades at 2.0 to 3.5x annual commission. A health or Medicare book trades at 1.8 to 3.2x renewal commission. A life and annuity book trades lower, at 1.5 to 2.8x renewal commission, reflecting lower renewal persistency in that line. A single-producer book, meaning one agent's personal book rather than a multi-producer agency, trades at 1.5 to 3.5x commission, with the range depending heavily on how transferable the client relationships are without that one producer.

RIA and wealth management practices below the larger-firm threshold are typically priced at 1.5 percent to 3.0 percent of assets under management (AUM), or equivalently at 2 to 3x recurring fee revenue. Either method should land in a similar place, and a buyer or broker should be able to show you the math translating one into the other.

Accounting and tax practices are priced at 0.9 to 1.35x annual fee revenue. This is one of the few categories where the multiple is consistently below 1.0 at the low end, reflecting the reality that client retention after a change of ownership is never guaranteed, especially for tax-season-only relationships.

The four things that move you within the range

Once you know the range for your industry, four factors decide where in that range your business actually falls. First is recurring revenue: contracts, subscriptions, maintenance agreements, and renewal-based commissions all reduce a buyer's risk that revenue disappears the day you leave, and that pushes you toward the top of the range.

Second is owner dependence. If the business runs, sells, and delivers without you personally in the room every day, a buyer will pay more because they are buying a business rather than buying your job. Third is customer concentration. A business where no single customer is more than 10 to 15 percent of revenue is worth more than one where a handful of accounts make up the majority, because losing one relationship after a sale is a much smaller risk.

Fourth is provable earnings. Add-backs and adjustments only help your price if you can support them with real documentation, clean books, and an add-back list that a lender or buyer's accountant will accept. Businesses with messy, cash-heavy, or hard-to-verify books get discounted even if the underlying earnings are genuinely strong, simply because the buyer cannot prove what they are actually buying.

Why size alone raises the multiple

Within almost every category above, larger businesses trade at the higher end of the range even when nothing else changes, and the HVAC example makes this explicit: under $1 million in EBITDA gets 3.5 to 5x, while over $2 million gets 6 to 7x. This happens because size itself reduces risk. A bigger business usually has more management depth, more diversified customers, more institutional buyers competing for it, and access to better financing terms for the buyer. It is also simply a bigger, more efficient transaction for a buyer to complete, which attracts a wider and more competitive pool of buyers, including private equity and strategic acquirers who cannot economically pursue very small deals.

Sanity-checking a broker's quote

When a broker or buyer gives you a number, ask two questions before you react to it. First, what earnings figure or revenue figure are they applying the multiple to, and can they walk you through exactly how they calculated it? Second, where does their multiple fall in the range for your specific industry and size, and why there specifically. If a broker quotes you 6x SDE for a general small business with no unusual recurring revenue or scale, that is well outside the typical 2.5 to 4x range and deserves a direct question about what is driving it.

It is also worth checking whether the person quoting you is using the right basis at all. A restaurant quote that ignores equipment value, an insurance quote that applies an EBITDA multiple instead of a commission multiple, or an RIA quote that ignores AUM entirely are all signs the number was not built carefully for your specific type of business. These ranges are a reasonable starting point for that conversation, but remember they move with interest rates and buyer appetite, so treat them as a compass rather than a fixed destination.