Valuation · Updated Jun 23, 2026
Small Business Valuation Multiples by Industry — 2026
Small business sale prices are anchored to industry-typical multiples on EBITDA (for $1M+ EBITDA businesses) or SDE (Seller's Discretionary Earnings, for smaller owner-operator businesses). The right multiple depends on industry, scale, growth rate, customer concentration, and quality of financials. Below are the median observed multiples for completed small-business transactions in 2024–2026 across the industries Rubric Financial typically serves.
Benchmark data
| Industry | SDE Multiple (sub-$1M EBITDA) | EBITDA Multiple ($1M–$5M) | Revenue Multiple (where used) |
|---|---|---|---|
| Professional services | 2.0–3.2x | 3.5–5.0x | 0.6–1.2x |
| Marketing agencies | 2.2–3.5x | 4.0–6.5x | 0.7–1.3x |
| Healthcare practices | 2.5–4.0x | 4.5–7.0x | 0.8–1.5x |
| E-commerce / DTC | 2.5–4.5x | 3.5–6.0x | 0.5–1.2x |
| SaaS (bootstrapped) | 3.0–6.0x | 5.0–9.0x | 2.0–5.0x |
| Restaurants (single) | 1.5–2.5x | — | 0.25–0.4x |
| Restaurants (multi-unit) | — | 4.0–6.5x | 0.4–0.8x |
| Construction & trades | 1.8–3.0x | 3.5–5.5x | 0.3–0.6x |
| Small manufacturing | 2.5–4.0x | 4.0–6.5x | 0.4–0.8x |
| Real estate ops | — | 5.0–8.0x | — |
| Distribution & wholesale | 2.0–3.5x | 3.5–5.5x | 0.2–0.5x |
| B2B services | 2.2–3.5x | 4.0–6.0x | 0.6–1.2x |
SDE multiple = Sale price / Seller's Discretionary Earnings (owner's salary + benefits + non-cash + discretionary expenses + EBITDA). Used for owner-operator businesses, typically under $1M EBITDA. EBITDA multiple = Sale price / EBITDA. Used for larger SMBs with management teams. Revenue multiple is most common for recurring-revenue SaaS-style businesses. Ranges reflect 25th–75th percentile of transactions in BVR's DealStats, IBA's MarketIQ, and BizBuySell's quarterly reports for the period.
Key takeaways
- Healthcare practices and SaaS command the highest multiples in their respective ranges, driven by recurring revenue (healthcare) and scalable margins (SaaS).
- Restaurants and construction sit at the low end of the SDE multiple range — high working capital requirements and operator-dependence depress multiples.
- Add-backs matter. The right SDE / EBITDA add-backs (owner comp normalization, one-time expenses, related-party rents, owner-personal expenses) can move sale price 15–30%. Buyers will scrutinize them; you should anticipate that.
- Customer concentration kills multiples. 30%+ revenue from a single customer typically drops the multiple by 0.5–1.5x. Diversify before going to market.
- Quality of financials matters more than most owners realize. Accrual-basis GAAP financials defended by a CPA can add 0.5–1.0x to the multiple over cash-basis books with no review.
Sources
- BVR DealStats — Q1-Q4 2025 transactions
- IBA MarketIQ Database
- BizBuySell Insight Report, multiple quarters 2024–2026
- Rubric Financial valuation engagement experience
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