EBITDA multiples by industry are the fastest way to sanity-check what a business might sell for, but the industry average is only a starting point. Where a specific business lands inside its range is set by size, recurring revenue, growth, customer concentration, and how dependent the business is on its owner. This guide gives you current US multiples by industry and by deal size, each figure sourced and dated, then shows how to turn a benchmark into a defensible number for your own business.
Key takeaways
- EBITDA multiples rise sharply with size. Main Street businesses under $2M in value trade at roughly 2x to 3x seller's discretionary earnings, while private-equity-sponsored lower-middle-market deals ($10M to $500M) averaged 7.2x adjusted EBITDA for full-year 2025, per GF Data.
- The industry average is a midpoint, not a price. Two businesses in the same sector with identical earnings can trade a full turn or more apart, because buyers price risk and growth, not the label of the industry.
- Recurring revenue is the biggest upward lever. Businesses with 80%+ recurring revenue command premiums of 1.5x to 2.5x above their industry median; owner-dependent businesses sell at a 1.0x to 2.0x discount.
- Small businesses are quoted on SDE, larger ones on EBITDA. Below roughly $2M of value the market uses seller's discretionary earnings; above it, adjusted EBITDA becomes the standard base (IBBA Market Pulse, Q3 2025).
- Add-backs and preparation move the number more than the market does. Defensible adjustments to earnings, plus reduced owner dependence and cleaner recurring revenue, carry a business from the bottom of its range to the top.
- A multiple is a starting point, not a guarantee. Use it to frame a range, then verify with a proper valuation before anchoring on a price.
Headline benchmarks by deal size
EBITDA multiples in the US move with deal size first and industry second. The clearest way to read the market is the size ladder: the same business earns a higher multiple simply for being larger and less risky to a buyer. The table below summarizes current US benchmarks across the size spectrum.
| Business size (enterprise value) | Earnings base | Typical multiple (2025) | Source |
|---|---|---|---|
| Under $500K | SDE | ~2.0x SDE | IBBA Market Pulse, Q3 2025 |
| $500K - $1M | SDE | ~2.5x SDE | IBBA Market Pulse, Q3 2025 |
| $1M - $2M | SDE | ~3.0x SDE | IBBA Market Pulse, Q3 2025 |
| $2M - $5M | EBITDA | ~4.0x EBITDA | IBBA Market Pulse, Q3 2025 |
| $5M - $50M | EBITDA | ~6.5x EBITDA | IBBA Market Pulse, Q3 2025 |
| $10M - $500M (PE-sponsored) | Adjusted EBITDA | 7.2x (FY 2025 avg) | GF Data, Q4 2025 report |
US benchmarks, current as of the Q3-Q4 2025 reporting cycle. Businesses under roughly $2M are quoted on SDE; larger businesses on EBITDA. Ranges vary by industry, growth, and market conditions.
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EBITDA Multiples by Industry: 2026 Data Table
EBITDA multiples for SMB service businesses with enterprise values between $1M and $50M typically run from 3.0x to 12.0x, depending on industry and profile. The ranges below reflect published US transaction data from GF Data, IBBA Market Pulse, BizBuySell, and the DealStats Value Index (BVR), read against FISART's advisory experience in the lower middle market. They are guide values, current as of mid-2026, not a promise of outcome.
| Industry | EBITDA Multiple Range | Median | What Drives the Premium | What Drives the Discount |
|---|---|---|---|---|
| Plumbing | 4.0x - 6.5x | 5.0x | Service agreements (40%+ recurring), multi-location, licensed workforce | Owner-operated, residential-only, single truck rolls |
| HVAC | 4.5x - 7.5x | 5.5x | Maintenance contracts (50%+ recurring), commercial mix, geographic density | Seasonal concentration, owner on tools, single brand dependency |
| Electrical | 4.0x - 6.5x | 5.0x | Commercial/industrial mix, recurring maintenance, multi-branch | Residential-only, permit-dependent, owner as master electrician |
| Landscaping | 3.5x - 6.0x | 4.5x | Commercial contracts (60%+ recurring), year-round services, irrigation/hardscape mix | Seasonal-only mowing, residential, crew turnover above 50% |
| Pest Control | 5.0x - 8.5x | 6.5x | Monthly/quarterly service contracts (80%+ recurring), route density, low cancellation | Irregular service calls, owner-run routes, rural territory |
| Commercial Cleaning | 3.0x - 5.5x | 4.0x | Long-term janitorial contracts, government/institutional clients, trained supervisors | High labor turnover, single large client, owner manages all crews |
| IT Managed Services | 5.0x - 10.0x | 7.0x | Monthly recurring revenue (85%+), low churn (<5%), cybersecurity offering, sticky tech stack | Break-fix revenue, owner as primary engineer, single vertical |
| Home Healthcare | 5.0x - 9.0x | 7.0x | Medicare/Medicaid certification, skilled nursing mix, multi-state licensing, low readmission rates | Non-medical only, single referral source, high aide turnover |
| Dental Practices | 5.0x - 8.0x | 6.0x | Multi-provider, DSO-ready infrastructure, specialist services, patient base 2,000+ | Solo practitioner, owner provides 80%+ of production, aging patient base |
| Veterinary Clinics | 6.0x - 10.0x | 7.5x | Multi-doctor, emergency/specialty services, corporate-ready ops, growing patient count | Solo vet, owner-dependent, rural location, declining caseload |
| Accounting Firms | 4.0x - 7.0x | 5.0x | Advisory/consulting revenue (30%+), client retention 95%+, staff CPAs, diversified base | Tax-season-only revenue, owner manages all clients, aging client base |
| Insurance Agencies | 7.0x - 12.0x | 8.5x | Renewal commissions (85%+ retention), diversified book, commercial lines, agency management system | Personal lines only, single carrier, owner holds all relationships |
| Staffing Agencies | 3.5x - 7.0x | 5.0x | Contract staffing (recurring), multi-vertical, high gross margins (30%+), diversified client base | Temp-only, single client >25% of revenue, low margins (<20%) |
See the full business valuation multiples picture across metrics
What Drives EBITDA Multiple Differences
Five factors explain most of the variation in EBITDA multiples within any given industry: recurring revenue, owner dependency, customer concentration, growth, and size. Two businesses with the same EBITDA in the same sector routinely trade a full turn apart, and the difference is almost always one of these five.
Recurring Revenue Premium
Businesses with predictable, contracted recurring revenue trade at higher multiples. This is the single largest driver of valuation differences within an industry.
The pattern is consistent. Service businesses with less than 30% recurring revenue typically trade at the low end of their industry range. Businesses with 50-70% recurring revenue trade at or above the median. Businesses with 80%+ recurring revenue command premiums of 1.5x-2.5x above the industry median.
Recurring revenue reduces risk for the buyer. A pest control company with 3,000 monthly service agreements has a fundamentally different risk profile than one relying on seasonal call volume.
Owner Dependency Discount
Owner dependency is the most common reason a business sells below its industry median. If the owner is the primary technician, the primary salesperson, or the primary client relationship holder, a buyer faces transition risk.
In FISART's advisory experience, businesses where the owner works 50+ hours per week and holds the primary client relationships sell at a 1.0x-2.0x discount. Businesses with a general manager, department leads, and documented processes sell at or above the median.
The question a buyer asks is: "What happens to revenue if the owner leaves in 12 months?" If the answer is "revenue drops 30%+," the multiple drops accordingly. FISART quantifies owner dependency as part of every valuation engagement, so sellers know exactly where they fall on this spectrum before a single buyer asks the question.
Customer Concentration Risk
A business where one client represents more than 20% of revenue carries concentration risk. If that client represents more than 40% of revenue, many buyers will either discount the multiple by 1.0x-1.5x or structure the deal with an earn-out tied to retention.
The ideal profile is no single client above 10% of revenue, with the top 10 clients representing less than 40% of total revenue. Commercial cleaning and staffing agencies are the industries most frequently affected by concentration risk.
Growth Trajectory
Buyers pay more for businesses growing revenue and EBITDA year-over-year. A business growing at 15%+ annually will receive offers 0.5x-1.5x above a flat or declining peer.
The growth must be organic and sustainable. Revenue growth driven entirely by one large contract win or a one-time project does not command the same premium. Buyers discount growth that depends on factors the current owner controls but the next owner may not replicate.
Size Premium
Larger businesses within the same industry trade at higher EBITDA multiples. This is called the "size premium" and it is well documented in US M&A data: GF Data measures a gap of nearly a full turn of EBITDA between sub-$10M deals and the $10M-$25M tier.
| EBITDA Level | Typical Multiple Range | Why |
|---|---|---|
| $500K - $1M | 3.0x - 4.5x | Higher risk, owner-dependent, limited buyer pool |
| $1M - $2M | 4.0x - 5.5x | More buyer interest, some management in place |
| $2M - $5M | 5.0x - 7.0x | Private equity eligible, management team exists |
| $5M+ | 6.0x - 9.0x+ | Institutional buyer pool, scalable platform |
GF Data's 2025 reporting confirms this pattern across all industries. Full-year 2025 purchase-price multiples averaged 7.2x trailing-twelve-month adjusted EBITDA for private-equity-sponsored deals from $10M to $500M in enterprise value, with the $10M-$25M tier near 5.9x and larger $100M-$250M deals near 10.0x.
See where your business sits in its range with a data-backed estimate from the FISART valuation calculator, then pressure-test it against these benchmarks.
Get StartedWorked Example: From Adjusted EBITDA to Enterprise Value
The clearest way to see how a multiple works is to run one business through the math. Consider a home-services business with $1.6M of reported EBITDA, preparing for a sale in the $5M-$50M band. The first step is to normalize earnings with defensible add-backs, then apply the industry multiple.
| Step | Item | Amount |
|---|---|---|
| Reported EBITDA | Earnings before interest, taxes, depreciation, amortization | $1,600,000 |
| Add-back | Above-market owner compensation | +$250,000 |
| Add-back | One-time legal and consulting costs | +$80,000 |
| Add-back | Personal expenses run through the business | +$70,000 |
| Adjusted EBITDA | Normalized earnings base | $2,000,000 |
| Multiple | Industry benchmark for the size band | 6.0x |
| Enterprise value | Adjusted EBITDA x multiple | $12,000,000 |
Illustrative example. Actual add-backs and multiples vary by business, sector, and market conditions.
Enterprise value is not the cash a seller keeps. The actual proceeds depend on deal structure, including any earn-out or seller note, the working-capital adjustment, debt, and taxes.
How a full business valuation works, end to end
How to Read These Numbers
An EBITDA multiple is one input in a valuation, not the final price. This section is for business owners encountering these numbers for the first time.
EBITDA Multiples Are a Starting Point
The final sale price depends on many additional factors: deal structure, buyer type, competitive dynamics, and negotiation. The multiples in this article reflect what buyers have actually paid in recent US transactions. They are backward-looking, and future transactions may differ based on market conditions, interest rates, and buyer demand.
SDE vs. EBITDA: Which Applies to Your Business
Two metrics are used to value SMB service businesses: Seller's Discretionary Earnings (SDE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
SDE adds back the owner's total compensation to net income, along with interest, taxes, depreciation, and amortization. SDE is the standard metric for owner-operated businesses generating less than approximately $1M in adjusted earnings. SDE multiples for SMB service businesses typically range from 2.0x to 4.0x.
EBITDA does not add back owner compensation. It assumes the business pays a market-rate manager to replace the owner. EBITDA is the standard metric for businesses generating approximately $1M or more in adjusted earnings, or for businesses already run by a management team.
A general guideline: if you are the primary operator and your business generates less than $1M in adjusted earnings, start with SDE. If you have a management team in place or generate $1M+ in adjusted earnings, use EBITDA.
What "Enterprise Value" Means
The EBITDA multiples in this article produce an enterprise value, which is the total value of the business before adjusting for cash, debt, and working capital. The actual cash a seller receives at closing depends on the deal structure, including the balance-sheet adjustment, any earn-out or seller note, and tax treatment.
How small businesses are valued with SDE
Year-Over-Year Trends: 2024, 2025, and 2026
Through 2024 and 2025, EBITDA multiples held broadly steady for quality businesses while deal volume stayed soft and buyers grew more selective.
2024: Recovery and Recalibration
The Federal Reserve held the federal funds rate at 5.25%-5.50% through mid-2024 before beginning rate cuts in September 2024. High borrowing costs suppressed deal volume throughout the first half of the year.
EBITDA multiples remained stable for high-quality businesses during this period. Premium businesses with recurring revenue and management teams still received competitive offers, while weaker profiles saw fewer offers and longer time-to-close.
2025: Steady Multiples, Selective Buyers
Multiples held roughly flat while volume stayed constrained. GF Data reported full-year 2025 purchase-price multiples steady at 7.2x adjusted EBITDA for private-equity-sponsored deals from $10M to $500M, even as its tracked deal count fell 23% from 2024. The DealStats Value Index eased from 3.8x in Q2 2025 to 3.5x by Q4 2025 across all industries.
On Main Street, BizBuySell put the median sale price at $350,000, with the average cash-flow (SDE) multiple rising to 2.7x in Q1 2026. Buyers paid premiums for quality rather than lifting the whole market, and the gap between prepared and unprepared businesses widened.
2026 Outlook
Into 2026, the pattern favors well-prepared businesses over the broad market. Multiples for businesses with recurring revenue, management in place, and $2M+ of EBITDA remain firm, while owner-dependent or single-client businesses face longer processes and more scrutiny.
The main risk is macroeconomic: a shift in rate policy or a demand slowdown would pull volume and buyer confidence down. The controllable variable is preparation, which is what moves a business within its range regardless of where the market sits.
A worked HVAC valuation, from multiple to offer
What These EBITDA Multiples by Industry Mean for Your Business
The data above provides context, but every business is unique. Your specific multiple depends on the five factors outlined above: recurring revenue, owner dependency, customer concentration, growth trajectory, and size.
Three steps move you from these reference numbers to an actual estimate:
- Identify your industry range from the table above
- Assess where you fall on the five value drivers
- Get a data-driven valuation that accounts for your specific financial profile, market position, and buyer demand in your geography
A business in the upper quartile on most value drivers will typically receive offers in the top third of the range. A business in the lower quartile will receive offers in the bottom third or below the range. A structured, competitive sale process also lifts the realized multiple, because bidding buyers price against each other rather than anchoring low.
How a competitive sale process lifts your multiple
Why customer concentration discounts your multiple
About the author: Philipp Massmann guides owners of mid-market companies through the sale process at FISART, from valuation to competitive bidding.
Published on March 10, 2026. Last updated on July 6, 2026.