Business Valuation Multiples by Industry

What a business is actually worth depends heavily on what industry it's in. A landscaping company and a SaaS business with identical earnings trade at very different multiples. This directory covers typical SDE and EBITDA multiples for 18 industries — with the deal math and the specific factors that push valuations up or down in each sector.

Use these ranges to benchmark any asking price. Then plug your numbers into the SDE & EBITDA calculator to compute your own valuation estimate, or the deal stack calculator to model how to fund the acquisition.

The ranges are starting points, not automatic offers. A business earns a higher multiple when its cash flow is transferable, documented, recurring, and not dependent on one owner or one customer. It earns a lower multiple when the buyer must replace the seller's labor, rebuild weak books, inject capital after closing, or accept concentrated revenue risk. The right multiple is the one you can defend after reviewing financial statements, operating metrics, customer files, contracts, equipment condition, and the seller's transition plan.

How to Choose the Right Multiple

First, match the multiple to the earnings metric. Main Street, owner-operated companies are usually priced on SDE because the buyer may personally replace the seller. Larger companies with a management team are more often priced on EBITDA because owner compensation is treated as an ongoing management cost. Asset-heavy or recurring-revenue sectors may also use revenue, EBITDA, ARR, or asset value depending on the buyer pool.

Second, normalize earnings before applying the multiple. Recast the P&L, remove only supportable add-backs, and adjust for a market-rate manager if you will not personally operate the company. A 3x multiple applied to inflated SDE is still an inflated price. Third, compare the modeled purchase price to debt-service capacity. A multiple that looks normal in a broker listing may still fail if the business cannot cover SBA payments, seller notes, working capital, and buyer compensation.

Multiple Drivers Across Industries

• Recurring revenue: maintenance contracts, subscriptions, retainers, memberships, and route density usually support higher multiples.
• Transferability: documented processes, trained staff, assignable contracts, clean licenses, and seller transition help protect post-close earnings.
• Customer concentration: a business with one customer representing 35% of revenue usually deserves a discount even if recent earnings are strong.
• Capital intensity: aging fleet, equipment, facilities, or inventory can reduce value because the buyer must fund replacement after closing.
• Owner dependence: if the seller is the salesperson, technician, estimator, and general manager, the business is riskier than its income statement suggests.

Service Businesses

Food & Hospitality

Retail & Consumer

Industrial & B2B

Professional & Healthcare

Technology

Using Multiples With the Deal Stack Calculator

Once you select a defensible multiple, calculate a valuation range and compare it to the seller's asking price. Then model the actual funding stack. A service business with limited hard assets may require more seller financing or buyer equity. A laundromat, car wash, manufacturing company, or distribution business may support more asset-based financing because equipment, receivables, inventory, or real estate can serve as collateral. A SaaS or professional-services company may have strong margins but fewer hard assets, making retention, churn, contracts, and seller transition more important than collateral.

Do not stop at "industry average." Use the relevant industry page below to identify the specific diligence questions for that sector, then use the calculators to test price, debt service, seller financing, earnouts, and out-of-pocket cash at closing.

Multiple ranges reflect typical small-to-lower-middle-market transactions. Individual deals vary based on business quality, growth trajectory, customer concentration, and market conditions. Sources: BizBuySell Insight Report, IBBA Market Pulse.

How to Use This Directory

Start with the industry range, then decide where the specific target belongs inside that range. A business with recurring revenue, clean books, trained staff, transferable contracts, and low customer concentration belongs higher. A business with weak documentation, owner dependence, customer risk, or deferred capital needs belongs lower.

After choosing a range, test the resulting value in the calculators. If the business cannot support debt service or requires more cash than the buyer can bring, the market multiple is not enough. The acquisition also needs a workable structure.