Business valuation multiples express the relationship between a business's sale price and its earnings (typically SDE or EBITDA). Understanding typical multiples for your industry gives you a realistic baseline for valuation conversations before engaging advisors.
High-Multiple Categories (3x-8x SDE)
IT and managed service providers (4x–8x with strong MRR), HVAC companies with maintenance contract revenue (3x–5x), veterinary practices (5x–8x individual; higher for corporate sales), pest control companies with service agreement books (3x–6x), car wash businesses with unlimited memberships (6x–12x EBITDA), and dental practices (4x–7x) consistently command the highest multiples due to recurring revenue, scalability, or active corporate acquisition demand.
Mid-Multiple Categories (2x-4x SDE)
Most service businesses fall in this range: HVAC installation-only (2x–3x), plumbing (2.5x–4x), auto repair (2x–3.5x), landscaping (2x–4x), accounting firms (2x–4x or 0.9x–1.3x revenue), insurance agencies (2x–4x or 1.5x–2.5x commissions), fitness studios (2x–4x), and cleaning services (2x–4x). Multiple variance within each category depends on recurring revenue percentage, owner dependency, and growth trends.
Lower-Multiple Categories (1x-2.5x SDE)
Restaurants (1.5x–3x), bars (1.5x–3x), retail businesses (1x–2.5x), food trucks (1.5x–2.5x), and cash-intensive businesses with documentation challenges typically sell at lower multiples reflecting higher risk perception. Multiples in these categories are more sensitive to specific quality factors (lease term, staff stability, documentation quality) than in higher-multiple categories.
These are benchmarks, not guarantees. Individual businesses can trade significantly above or below category norms based on specific characteristics. A professional valuation applies industry benchmarks to your specific business's data to produce a defensible, market-tested estimate of value.
Recast Seller’s Discretionary Earnings, then apply a planning multiple for this Illinois business. Replacement labor is subtracted. This is a planning tool, not an appraisal.
Before debt, working-capital peg, holdback, and tax. Educational only.
How Illinois buyers put a number on common business valuation multiples by industry
This page is the valuation guide. It is not the sale-process playbook. Seller’s discretionary earnings (SDE) is the cash a full-time working owner can take after you normalize the books. Start with the tax return. Add owner pay and one-time costs. Subtract the wage you must pay to replace the owner.
SDE line items buyers actually use
- Reported net profit (tax return, not the marketing P&L)
- + Interest expense
- + Income taxes (not payroll, sales, or property tax)
- + Depreciation and amortization
- + Owner W-2, bonuses, and payroll taxes on the owner
- + Discretionary owner benefits that a buyer will not keep (auto, personal travel, family on payroll with no role)
- + Accepted one-time or non-recurring expenses
- − Market-rate replacement labor for owner work that will not transfer
- = Seller’s Discretionary Earnings (SDE)
Documents to gather this week
- Three years of signed business tax returns and matching P&Ls
- Year-to-date P&L, balance sheet, and three months of bank statements
- Current lease, amendments, and a plain-English remaining term
- License and permit list, including who holds each card
- Top-customer concentration (names redacted until an NDA)
A simple Illinois close calendar
Plan six to twelve months from cleanup to close on a prepared Main Street deal. Start CBS-1 and any Chicago or Cook notices at letter-of-intent, not the week of funding. Landlord consent often takes longer than the lender.
Related pages on this site
Educational only — not legal, tax, or a formal appraisal. Confirm bulk-sale notices, licenses, and tax allocation with counsel and a CPA.
Questions
No. This is education and planning math. A professional opinion of value is a confidential conversation. We work on a success fee if you engage a sale process. There is no file-upload portal.
Start with adjusted seller’s discretionary earnings, then a vertical planning band. A marketplace average is context, not your quote.
Personal professional licenses do not transfer. Municipal registrations and state notices have their own calendars. Confirm the path before you grant exclusivity.
Most prepared Main Street sales take about six to twelve months from cleanup to close. License transfers, landlord consent, and SBA underwriting add weeks.
CBS-1 is the Illinois bulk-sale notice. File it at least ten business days before an asset transfer that meets the statute. Late filing can put Illinois tax risk on the buyer.