EBITDA Multiples by Industry 2026: SME Valuation Ranges (AU & UK)

Q: What EBITDA multiple do small businesses sell for?

Most SMEs in the $1M–$10M range sell for 2–6x Adjusted EBITDA. Owner-dependent micro businesses sit at 2–3x, established trades and services at 3–4.5x, professional and IT services at 4–6x, and strong recurring-revenue businesses at 5–8x or more. US transaction data shows an average earnings multiple of about 2.6x at the smaller end of the market (BizBuySell, Q1 2026).

Q: Why do multiples differ so much between industries?

The multiple prices risk and durability of earnings. Industries with contracted or recurring revenue, low customer churn and transferable operations command higher multiples; industries exposed to discretionary spending, key-person risk or low barriers to entry command lower ones.

Q: Does business size change the multiple?

Yes — materially. The same business at $2M EBITDA typically commands a higher multiple than at $500k EBITDA, because larger businesses have management depth, diversified customers and easier financing. Crossing roughly $1M EBITDA often lifts the multiple by 0.5–1.5x.

Q: Are these multiples on revenue or EBITDA?

EBITDA (adjusted/normalised earnings). Revenue multiples are much lower — US small-business transaction data averages about 0.67x revenue versus 2.6x earnings (BizBuySell, Q1 2026) — and are only the norm for high-growth tech.

Q: How do I find the right multiple for my business?

Start from your industry's indicative range, then adjust inside it for recurring revenue, customer concentration, owner-dependence, growth and margin quality. Or upload three years of figures to BuyBuildSell and it benchmarks your business and calculates a Smart Valuation — free during your trial.

By John Warner, founder of BuyBuildSell — the AU & UK M&A deal room · Last updated: July 2026

The industry sets your range. The quality of your earnings decides where you sit inside it. Both halves of that sentence matter — a well-run business at the top of a low-multiple industry regularly out-prices a mediocre one in a “hot” sector.

Indicative EV/EBITDA multiples by industry

For businesses in the $1M–$10M revenue range, valued on Adjusted EBITDA:

Industry	Typical EV / EBITDA	What drives the range
Hospitality, cafés & food service	1.5–3×	Discretionary spend, thin margins, location risk
Retail (bricks & mortar)	2–3.5×	Lease terms, foot traffic, online exposure
E-commerce & online retail	2.5–4×	Platform dependence, repeat-purchase rate
Trades & construction services	2.5–4×	Owner-dependence, licensing, contracted pipeline
Transport & logistics	3–4.5×	Fleet condition, contract cover, fuel exposure
Distribution & wholesale	3.5–5×	Supplier agreements, customer spread, stock quality
Manufacturing & engineering	3.5–5.5×	Capex needs, order book, niche vs commodity
Professional & B2B services	3.5–5.5×	Client concentration, staff retention, repeat work
Healthcare, allied health & childcare	4–6×	Regulated demand, funding streams, practitioner dependence
IT services & managed service providers	4–6.5×	Contracted recurring revenue, churn, ticket concentration
Software / SaaS & contracted recurring revenue	5–8×+	Net revenue retention, growth, gross margin

These are indicative ranges for AU & UK SME transactions, not a quote — individual deals regularly fall outside them with structure (earn-outs, vendor finance) doing the bridging. Always cross-check against your own sector’s recent sales.

What the transaction data shows

At the smaller end of the market, completed US small-business sales averaged a 2.57× earnings multiple and about 0.67× revenue in Q1 2026, according to the BizBuySell Insight Report — US data, but directionally consistent with the lower bands above.
The gap between an earnings multiple (~2.6×) and a revenue multiple (~0.7×) is why headline “I sold for 1× revenue” stories mislead: the two bases aren’t comparable. SMEs are priced on earnings.
Method references: the business.gov.au valuation guide and Xero’s guide both describe earnings-multiple valuation as the standard SME approach.

The size effect: bigger EBITDA, bigger multiple

Multiples aren’t flat across size. The same business tends to command a higher multiple as EBITDA grows, because size brings management depth, customer spread and easier financing:

Adjusted EBITDA	Typical effect on multiple
Under $250k	Bottom of the industry range — buyer is buying a job
$250k–$1M	Mid-range — the classic SME deal, bank-financeable
$1M–$3M	+0.5–1.5× over mid-range — PE and search funds enter the buyer pool
$3M+	Top of range and above — strategic and institutional buyers compete

Moving up inside your range

Wherever your industry sits, the same levers move you inside the band:

Up: contracted or recurring revenue, no customer over ~20% of sales, a manager who isn’t the owner, three years of clean growing accounts, documented systems.
Down: owner-held relationships, lumpy project revenue, one dominant customer, messy add-backs, deferred capex the buyer must fund. See EBITDA add-backs explained for the earnings half of the equation.

Benchmark your business in minutes

Upload three years of figures and BuyBuildSell calculates your Adjusted EBITDA, applies a benchmarked multiple, and shows the value the earnings can actually finance — free during your trial.

Value a business free → I’m a seller →

Frequently asked questions

What EBITDA multiple do small businesses sell for?

Most SMEs sell for 2–6× Adjusted EBITDA: 2–3× for owner-dependent micro businesses, 3–4.5× for established trades and services, 4–6× for professional and IT services, and 5–8×+ for strong recurring-revenue businesses.

Why do multiples differ so much between industries?

The multiple prices risk and durability of earnings — recurring revenue and regulated demand raise it; discretionary spend, key-person risk and low entry barriers lower it.

Does business size change the multiple?

Yes. Crossing roughly $1M EBITDA often lifts the multiple by 0.5–1.5× as management depth, customer spread and financing options improve.

Are these multiples on revenue or EBITDA?

EBITDA. Revenue multiples run far lower (~0.67× on average in US small-business sales) and are only the norm for high-growth tech.

How do I find the right multiple for my business?

Start from your industry range, adjust for earnings quality — or upload three years of figures to BuyBuildSell for a benchmarked Smart Valuation, free during your trial.