What multiple will my business sell for?

The short answer

Your multiple reflects how much risk a buyer sees in the earnings they are buying. Size, growth, owner-dependence and recurring revenue can matter more than your industry label. Pepperdine reports median EBITDA multiples of 3.00x–7.50x across the company-size bands it surveyed; that is context for a discussion, not a price for your business.¹

First, ask what the multiple is multiplying

A multiple without an earnings definition tells you very little. Ask whether the number is based on EBITDA, or seller's discretionary earnings (SDE). SDE adds back an owner's compensation and benefits; EBITDA is a different starting point. You cannot compare the two multiples as if they describe the same earnings.

IBBA and M&A Source use SDE for deals under about $2M in purchase price and EBITDA for $2M–$50M deals.² Pepperdine reports SDE medians of 2.50x–4.25x by size.¹ Those figures belong alongside their earnings measure and size band. Applying a headline SDE multiple to EBITDA can give you a misleading answer.

Then check the adjustments. If you add back an expense, could a new owner actually stop paying it? If someone must replace your work, that cost belongs in the picture. Ask your advisor to show the earnings bridge in plain English, with documents behind each adjustment.

What changes the risk a buyer sees

1. Size and growth

   Compare yourself with businesses of a similar size before looking at industry averages. Then explain where growth comes from. A buyer needs to understand whether demand is repeatable, whether the business can serve it, and what spending is needed to keep it going. A busy year alone does not answer those questions.

2. How much runs through you

   If customers, pricing and daily decisions all depend on you, a buyer has a handoff problem to solve. Key-person dependence is a valuation factor in IRS Revenue Ruling 59-60.³ A capable team and documented responsibilities help you explain how the business would operate after you leave. There is no universal percentage discount to apply.

3. How earnings repeat

   Recurring revenue is useful when a buyer can understand what keeps customers coming back. Show the contracts, renewal terms and customer history behind the label. Explain any concentration and upcoming renewals. The question is whether the earnings can continue under a new owner, not whether a sales presentation calls them recurring.

Keep larger-deal headlines in their lane

For larger deals, GF Data reported an average of 7.0x EBITDA in Q2 2026 and 7.1x in the first half, covering $10M–$500M deals.⁴ That is a different population from many owner-led sales. It is also an average, while the Pepperdine figures above are medians. Neither is a ready-made offer.

When someone quotes a comparable sale, ask what was sold, which earnings period was used, and what the terms included. A headline number cannot tell you whether the comparison fits your company. An advisor should be able to explain why a particular comparison belongs in your discussion.

Use a range to plan your next move

Start with the earnings you can support, then discuss a range and the reasons a buyer might argue for either end. Separate facts you can document from assumptions that still need checking. That gives you something useful to work on before you go to market.

If the gap is owner-dependence, focus on the handoff. If it is unclear earnings, focus on the records. You do not need to fix everything at once. For the full path from earnings to proceeds, see How much is my business worth?.

Sources

1. Pepperdine Graziadio Business School, Private Capital Markets Report 2026
2. IBBA and M&A Source, Market Pulse Q2 2026
3. IRS Revenue Ruling 59-60
4. GF Data public release via ACG (Q2 2026)