What's That Business
Really Worth?
The 2026 SMB Valuation Multiples Guide — SDE and revenue multiples across 12 industries, broken down by revenue band, with the quality factors that make or break your deal price.
Valuation is where most acquisitions go wrong. Overpay and you're underwater from day one. Lowball and the seller walks. This guide gives you the exact multiples that businesses are trading at across 12 service industries — sourced from our analysis of hundreds of BizBuySell listings and cross-referenced with PE transaction data.
Industry Multiples at a Glance
SDE multiples for businesses in the $500K-$5M revenue range. Revenue multiples reflect typical deal pricing.
| Industry | SDE Low | SDE Mid | SDE High | Revenue Multiple |
|---|---|---|---|---|
| HVAC | 2.5x | 3.25x | 4.5x | 0.3x - 1.4x |
| Pest Control | 3.0x | 4.0x | 6.0x | 0.8x - 2.0x |
| Fire Protection | 2.5x | 3.5x | 5.0x | 0.5x - 1.5x |
| Car Wash | 3.0x | 4.5x | 6.0x | 1.0x - 2.5x |
| Laundromat | 2.5x | 3.5x | 5.0x | 0.8x - 2.0x |
| Home Cleaning | 2.0x | 3.0x | 4.0x | 0.4x - 1.2x |
| Plumbing | 2.0x | 2.75x | 3.5x | 0.3x - 1.0x |
| Electrical | 2.0x | 2.75x | 4.0x | 0.3x - 1.2x |
| Moving & Storage | 2.0x | 2.75x | 3.5x | 0.3x - 0.8x |
| Roofing | 1.5x | 2.5x | 3.5x | 0.2x - 0.8x |
| Auto Repair | 1.5x | 2.25x | 3.0x | 0.2x - 0.6x |
| Landscaping | 1.5x | 2.25x | 3.0x | 0.2x - 0.8x |
Source: The Deal Sheet analysis of BizBuySell listings and PE transaction data (2025-2026).
Multiples by Revenue Band
Size matters. Larger businesses command higher multiples due to reduced key-man risk, better systems, and more predictable cash flows.
| Revenue Band | SDE Multiple | EBITDA Multiple | Implied Value | Buyer Type |
|---|---|---|---|---|
| < $1M | 1.5x - 3.0x | N/A | $150K - $600K | Owner-operator, SBA buyer |
| $1M - $5M | 2.5x - 4.0x | Rarely used | $500K - $2.5M | Searcher, independent sponsor |
| $5M - $20M | 3.5x - 6.0x | 4.0x - 6.0x | $2M - $12M | Funded searcher, small PE |
| $20M+ | N/A | 7x - 11x | $10M - $50M+ | PE platform, strategic |
What Adds 0.5x - 1.0x to the Multiple
These quality factors consistently drive premium valuations. The more a business checks off, the closer to the high end of the range.
Recurring Revenue
40%+ revenue from service agreements, maintenance contracts, or subscription-style recurring. This is the single biggest multiple driver.
Manager-Run Operations
Owner works ON the business, not IN it. Documented SOPs, a GM or ops manager in place, and the business runs without daily owner involvement.
Diversified Customer Base
200+ active customers with no single customer exceeding 10% of revenue. Low concentration = low risk of revenue cliff.
Clean Financial History
3-5 years of tax returns matching P&L statements. Audited or reviewed financials. No cash transactions or personal expenses run through the business.
Growth Trajectory
10-15%+ annual revenue growth with margin expansion. Buyers pay more for momentum — a growing business is worth more than a flat one at the same SDE.
Strong Margins
15-20%+ EBITDA margin (varies by industry). Higher margins = more cash flow to service debt and fund growth post-acquisition.
What Subtracts 0.5x - 1.0x from the Multiple
These risk factors consistently push valuations toward the low end. Not deal-breakers, but they should be reflected in your offer price.
Owner-Dependent
Owner runs every call, handles all sales, and is the face of the business. No operational team or SOPs. The business doesn't survive the transition without the owner.
Customer Concentration
Top 5 customers represent 40%+ of revenue. Losing one or two accounts could wipe out your SDE. Especially risky if relationships are tied to the owner personally.
Project-Based Revenue
Primarily new construction or one-time project work. No recurring maintenance contracts. Revenue resets to zero each quarter — you're always hunting for the next job.
Messy Financials
Cash transactions, personal expenses, inconsistent bookkeeping, or tax returns that don't match claimed revenue. If you can't trust the numbers, you can't price the deal.
Flat or Declining Revenue
No growth trajectory or shrinking topline. Often signals market saturation, competitive pressure, or an owner who's checked out. Buyers pay for momentum, not stagnation.
Thin Margins
Below 10% EBITDA margin. Leaves no room for debt service, growth investment, or unexpected costs. One bad quarter could put you underwater.
How to Use This Guide
Example: HVAC Business, $1.8M Revenue
1. Find the industry row. HVAC → SDE range: 2.5x - 4.5x
2. Check the revenue band. $1M-$5M → typical SDE multiple: 2.5x - 4.0x
3. Assess quality factors. This business has 35% recurring revenue, the owner manages daily, and financials are clean but unaudited. That's 1 premium factor, 1 discount factor → nets to mid-range.
4. Apply the multiple. SDE of $450K x 3.25x midpoint = $1,462,500 estimated fair value
5. Sanity check. Compare to the asking price. If they're asking $2M, you know there's a $537K gap to negotiate — or walk away.
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