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.