EBITDA & SDE multiples by industry

What a multiple is

Most small and lower-middle-market businesses are priced the same way. You take a measure of profit and multiply it by a number. That number is the multiple, and it captures how much a buyer will pay for each dollar of your earnings.

So a business earning $1M a year, in a sector that trades around 5x, is worth roughly $5M before any adjustments. The multiple is shorthand for everything buyers care about: how risky the cash flow is, how fast it's growing, and how many buyers are competing for businesses like yours. A sector with predictable revenue and lots of active acquirers carries a higher multiple than one built on one-off projects.

SDE vs EBITDA: when each one applies

The two common profit measures are SDE and EBITDA, and which one you use depends mostly on the size of your business.

SDE (Seller's Discretionary Earnings) is net profit with the owner's salary and personal or one-time expenses added back. It answers a simple question: how much money does this business put in one owner-operator's pocket? It's the right measure for smaller, hands-on businesses, usually under about $1M in earnings.

EBITDA is earnings before interest, taxes, depreciation, and amortization. It does not add the owner's pay back in, because it assumes the business runs on a paid management team. It's used for larger companies, generally above $1M to $2M in earnings.

Here's the part that trips people up: SDE multiples are lower than EBITDA multiples for the same business. That's not a contradiction. SDE is a bigger profit number because it includes owner pay, so it gets multiplied by a smaller figure. The two methods tend to land in a similar place. If your earnings sit near the boundary, it's worth running both. If your business earns under roughly $1–2 million before paying yourself and you're pricing on SDE, the SDE multiples by industry report has the owner-operated benchmarks broken down by sector.

Typical earnings multiples by industry

The table below shows indicative lower-middle-market ranges by industry. Recurring-revenue and roll-up-favored sectors sit at the top. Thin-margin, project-based, or owner-dependent sectors sit at the bottom. Read the basis column carefully, since some sectors price on SDE, some on EBITDA, and some on either depending on size.

Industry	Typical multiple	Basis
HVAC & Home Services	4.0–7.0x	EBITDA
SaaS & Software	4.0–9.0x	EBITDA
MSP & IT Services	5.0–9.0x	EBITDA
Insurance Agency	5.0–9.0x	EBITDA
Pest Control	6.0–11.0x	EBITDA
Healthcare & Medical Practices	4.0–7.0x	EBITDA
Accounting & CPA Firms	3.0–6.0x	SDE/EBITDA
Manufacturing	4.0–6.0x	EBITDA
Logistics & Distribution	4.0–6.0x	EBITDA
Professional Services	3.0–5.0x	SDE/EBITDA
Marketing & Creative Agencies	3.0–6.0x	EBITDA
Construction & Trades	3.0–5.0x	EBITDA
E-commerce & Retail	3.0–5.0x	SDE
Restaurants & Food Service	2.0–4.0x	SDE
Other / General	3.0–5.0x	SDE/EBITDA

These match the ranges used in the ProCloser business valuation calculator. They are indicative, not a quote. Roofing companies land in the Construction & Trades range for residential project-heavy shops, or toward the HVAC & Home Services range for commercial maintenance-led businesses. See the roofing company valuation guide for the sector-specific breakdown. General contractors, specialty trade contractors, mechanical and HVAC contractors, and civil construction businesses all sit in the 3.0–5.0x range but trade at very different points within it; the construction business valuation multiples guide shows the sub-sector breakdown by contractor type. HVAC owners can find a full guide to the sale process, including what PE buyers look for in diligence and how to document your service agreements, in the guide to selling an HVAC business. For the sub-type valuation breakdown covering residential HVAC with maintenance agreements, commercial HVAC with building service contracts, and installation-only businesses, see the HVAC business valuation multiples guide. Plumbing businesses fall in the same 3.0–5.5x EBITDA range as Construction & Trades, with recurring commercial service agreements pushing them toward the top; see the guide to selling a plumbing business for the sector-specific breakdown including license transition planning. For sub-type multiples covering residential service plumbing, plumbing with maintenance agreements, commercial mechanical, and fire protection businesses, see the plumbing and mechanical business valuation multiples guide. Landscaping businesses also sit in the Construction & Trades range, with maintenance-focused companies that have documented annual contract bases selling for 2.5–4.5x SDE or EBITDA and managed commercial landscaping operations reaching 3.5–5.5x EBITDA; the full breakdown covering valuation, buyer types, route density, and recurring contract documentation is in the guide to selling a landscaping business. For a focused sub-type data table covering owner-operated, maintenance-led, and commercial landscaping multiples alongside contract penetration benchmarks, see the landscaping business valuation multiples guide. Manufacturing sellers who want to understand which advisors specialize in the 4.0–6.0x range should see the guide to the best M&A advisors for manufacturing companies, or the full process guide covering valuation multiples, buyer types, and diligence preparation in our guide to selling a manufacturing business. For sub-sector-specific data covering precision machining, food processing, specialty chemicals, and plastics fabrication, see the manufacturing valuation multiples by sub-sector dataset. Trucking and transportation company owners in the Logistics & Distribution range (4.0–6.0x EBITDA for asset-based carriers; 6.0–9.0x for asset-light freight brokerage) should see the guide to the best M&A advisors for trucking and transportation businesses for advisor rankings by sub-sector and deal size. E-commerce sellers in the 3.0–5.0x SDE range should see the guide to the best M&A advisors for e-commerce businesses. For a deeper breakdown of how multiples vary within ecommerce by sub-type — Amazon FBA, DTC branded, subscription, and dropship — see the ecommerce business valuation multiples guide. Dental practice owners in the Healthcare & Medical Practices range will find a full sector walkthrough covering DSO acquisitions, payer mix, and the specific regulatory steps in the guide to selling a dental practice; for sub-type multiples by practice category — solo, multi-doctor, specialty, and DSO-ready platforms — see the dental practice valuation multiples data table. Veterinary practice owners in the same Healthcare & Medical Practices range will find advisor rankings by practice type and buyer category, including how production-based compensation normalization affects EBITDA and where consolidator multiples differ from individual-buyer multiples, in the guide to the best M&A advisors for veterinary practice sales. Branded food and beverage manufacturers typically sell for 6–12x EBITDA depending on sub-sector, channel mix, and buyer competition; see the best M&A advisors for food and beverage companies for a ranking of advisors who specialize in CPG brands, food manufacturers, and beverage exits; for the sub-type valuation breakdown covering branded CPG, specialty beverage, natural food brands, and food manufacturing with EBITDA multiple ranges, see the food and beverage business valuation multiples guide. Staffing agency owners in the Professional Services range will find that sub-type matters significantly: light industrial temp agencies trade at the low end of 3.0–5.0x, while healthcare staffing firms with travel nursing programs can reach 6–10x EBITDA; the full breakdown by agency type is in the staffing agency valuation multiples guide. Restaurant owners will find that concept type drives a wide spread in multiples: single-unit owner-operated full-service restaurants trade at 1.5–3.0x SDE while QSR franchisee-owned units and multi-unit fast casual concepts can reach 4.0–6.0x EBITDA; the full sub-type breakdown is in the restaurant business valuation multiples guide. Marketing agency owners in the 3.0–6.0x EBITDA range will find a full process guide covering valuation by agency sub-type, which buyer categories compete at each tier, and how retainer revenue percentage determines where your agency lands within the range, in the guide to selling a marketing agency. Professional services owners, including accounting firms, management consulting practices, and engineering and architecture firms, will find a sub-type breakdown covering how client transferability, institutional contracts, and recurring retainer revenue affect the 3.0–5.0x range in the professional services business valuation multiples guide.

The ranges in the table reflect industry averages that span all deal sizes. Buyers pay more per dollar of EBITDA as deals cross the $5M and $25M thresholds, because a larger buyer pool competes for bigger businesses; the business valuation multiples by deal size guide shows exactly how the ranges shift across the under-$5M, $5M–$25M, and $25M–$100M tiers.

The same industries that earn the highest multiples also tend to run the longest sale processes — see the sector-by-sector data on average time to sell a business by industry to plan your timeline alongside your valuation expectations. For a full picture of what businesses in each deal tier sell for, close rates from listing to transaction, and how deal structure affects proceeds, see the 2026 business sale statistics report. SaaS and software companies are an exception to EBITDA-based pricing at many deal sizes: they typically trade on ARR multiples instead, with benchmarks by deal size in the SaaS revenue multiples by ARR tier: 2026 report. For businesses in other sectors that price on revenue — insurance agencies, healthcare services, tech services, and marketing agencies — the revenue multiples by industry report covers the cross-sector comparison. Once you have an idea of your valuation range, see the breakdown of what it costs to sell a business by deal size, covering advisor fees, legal, quality of earnings, and tax advisory as a percentage of enterprise value.

What moves a business within its range

Two businesses in the same industry, with the same earnings, can sell for very different prices. The industry sets the range. These factors decide where you land inside it.

• Growth. Steady year-over-year revenue growth is the strongest pull toward the top of the range. Flat or declining revenue pulls the other way.
• Recurring revenue. Contracts, subscriptions, and service agreements make cash flow predictable, and buyers pay up for predictability. This is the main reason pest control and SaaS sit so high.
• Margins. If your margins beat your peers and hold steady, buyers see a healthier, better-run business and price it accordingly.
• Customer concentration. When one client is more than roughly 15–20% of revenue, buyers worry about what happens if that client leaves, and they discount for it.
• Owner dependence. A business that keeps running when the owner steps back is worth more than one that depends on the owner for sales, relationships, or daily decisions.
• Clean books. Reviewed or audited financials and well-documented add-backs survive due diligence. Messy books invite price cuts late in the process.

Those add-backs have a direct multiplier effect on where your business lands within its range; our guide to recasting financials for a business sale covers which adjustments buyers accept and how to document each one so it holds up in diligence. For a category-by-category breakdown of which specific items qualify and which ones buyers consistently reject, see the EBITDA add-backs guide.

Why ranges, not single numbers

You'll notice every entry above is a range, not a point. That's deliberate. A single number would be false precision. The spread between the low and high end is where all the factors above play out. A pest control company growing 20% a year with recurring contracts and a real management team earns the top of its range. A flat one that leans on the owner earns the bottom.

The range tells you the realistic floor and ceiling for your sector. Narrowing it to one defensible number takes your actual financials and the comparables buyers are paying right now, which is what an advisor does.

How to estimate your own value

You can get a quick estimate in a couple of minutes. Take your annual earnings, decide whether you're using SDE or EBITDA, find your industry's range above, and multiply. Earnings near the boundary? Run both and look at the overlap.

The ProCloser business valuation calculator does this for you and returns a range with a midpoint. Once you have a value estimate, use our M&A advisory fee calculator to model what an advisor will cost at that deal size. When you're ready for a number you can take to a buyer, read our guide to selling your business or get matched with a vetted M&A advisor who'll review your financials against live comparables for free. Sellers preparing for the sale process can use the M&A data room checklist to organize the 80+ documents buyers request once diligence begins.

How buyers use valuation multiples in private company mergers and acquisitions

A valuation multiple only means something once a buyer applies it. In a private company merger or acquisition, the buyer's deal team takes your normalized SDE or EBITDA, picks a multiple from the range that fits your industry and your specific business, and uses that number as the opening anchor for price. Everything that follows in the mergers and acquisitions process, the letter of intent, the due diligence findings, the final purchase price, gets negotiated around that anchor.

This is different from public market valuation, where a share price is set every minute by trading. Private company mergers and acquisitions don't have a ticker, so the multiple is the closest thing to a market price a seller has before going to market. Buyers in strategic acquisitions use it one way: they start from the industry multiple, then add a premium for synergies, like eliminating a competitor or gaining your customer base, that make your business worth more to them specifically than the generic range suggests. Financial buyers, mainly private equity, use the multiple more mechanically. Their return model depends on buying at a rational multiple and exiting later at an equal or higher one, so they resist paying above the range unless your growth or recurring revenue clearly justifies it.

Knowing this changes how you prepare. If you understand which multiple a buyer will likely apply and why, you can address the gaps, like customer concentration or thin margins, that would otherwise get discounted during acquisitions diligence, before a buyer ever raises them.

Valuation multiples across services and other sectors

Services businesses, from professional services firms to marketing agencies to MSP and IT services companies, make up a large share of the private company mergers and acquisitions market, and they price on the same logic as every other sector: recurring, contracted services revenue earns a higher multiple than one-off project work. An IT services company billing under managed service agreements sells at the top of its range for the reasons in the table above, while a project-based professional services firm with no recurring contracts sells at the bottom, even at the same revenue. If your business is a services company, look at how much of your revenue is retainer or contract-based before you assume where you'll land in the range.