Business Valuation Multiples in 2026: What Your Business Is Worth Right Now

The most common question I hear from business owners is some version of "what's my business worth?" The answer almost always starts with valuation multiples — the benchmarks that tell you what businesses in your industry are actually selling for.

Here's where multiples stand heading into 2026, what's driving the shifts, and how to use this data to understand your own business value.

How Business Valuation Multiples Work

A valuation multiple is a ratio used to estimate business value based on a financial metric — usually Seller's Discretionary Earnings (SDE) for businesses under $1M in earnings, or EBITDA for larger ones.

The formula is straightforward:

Business Value = Earnings x Multiple

If your business generates $500K in SDE and businesses in your industry sell for a 3x multiple, the estimated value is $1.5M.

The trick is knowing what multiple applies to your business. Multiples vary by industry, size, growth rate, customer concentration, owner dependence, and dozens of other factors. The ranges I publish in my valuation multiples guide give you a starting point, but every business is different.

Where Multiples Stand in 2026

Multiples across most industries have stabilized after the volatility of 2022–2024. Interest rates are no longer climbing, SBA lending has recovered, and buyer activity is strong. Here are the broad trends:

Industries With Strong Multiples

Technology and SaaS. Software businesses with recurring revenue continue to command premium multiples — 4x–8x revenue for SaaS, higher for businesses with strong net revenue retention. The buyer pool (PE firms, strategics, and search funds) is deep and competitive.

Healthcare services. Dental, veterinary, behavioral health, and home health businesses are in high demand. PE roll-ups are still actively consolidating these sectors, which keeps multiples elevated. Dental practices with $1M+ EBITDA are routinely trading at 6x–8x.

Home services. HVAC, plumbing, and electrical companies with service agreement revenue and management teams remain PE favorites. Multiples for well-run home services businesses have held steady at 4x–7x EBITDA depending on size.

Business services. IT managed services, staffing, and professional services firms with recurring contracts are seeing sustained buyer interest. MSP multiples in particular have stayed strong as businesses spend more on cybersecurity and cloud infrastructure.

Industries Holding Steady

Manufacturing. Multiples for niche manufacturers with proprietary products or processes are stable at 3x–5x SDE. Commodity manufacturers face more pressure.

Construction trades. Specialty subcontractors (electrical, mechanical, fire protection) with diversified customer bases are trading at solid multiples. General contractors with project-based revenue and thin margins remain harder to value.

Auto services. Collision repair, tire/service, and car wash multiples have stabilized after years of PE-driven appreciation. The roll-up activity continues, but the easy gains in multiple expansion have largely been captured.

Industries Under Pressure

Restaurants. Post-pandemic normalization, rising labor costs, and thin margins continue to weigh on restaurant valuations. Single-location restaurants remain some of the hardest businesses to sell at attractive multiples. Multi-unit operators with strong unit economics fare better.

Retail. Brick-and-mortar retail multiples remain compressed outside of specialty niches. E-commerce businesses have more buyer interest, but multiples have come down from their 2021 peaks.

Staffing (light industrial/temp). Commoditized staffing segments face margin pressure from wage inflation and technology disruption. Specialized and professional staffing holds up better.

What's Driving Multiples Right Now

Buyer Activity Is Up

The number of active buyers in the market has increased. Search fund buyers have grown significantly, adding a well-capitalized buyer category to the traditional mix of individual buyers, strategic acquirers, and PE firms. More competition for quality businesses means better pricing for sellers.

SBA Lending Has Stabilized

After the rate shock of 2022–2023 squeezed SBA-financed deals, the lending environment has normalized. SBA 7(a) loans remain the primary financing vehicle for businesses selling below $5M, and lenders are actively pursuing deal flow. This supports multiples in the small business segment.

PE Dry Powder Remains High

Private equity firms are sitting on record levels of uninvested capital. The pressure to deploy that capital means aggressive bidding on platform acquisitions and continued add-on activity. For businesses above $1M EBITDA, PE remains the most likely source of premium multiples.

Quality Premium Is Widening

The gap between well-run and poorly-run businesses has never been wider. A business with clean financials, a management team, recurring revenue, and documented processes will sell for a meaningfully higher multiple than a similar business with messy books, owner dependence, and project-based revenue.

This isn't new, but the spread is more pronounced in 2026. Buyers have more options and more data. They're not overpaying for businesses that require heavy lifting.

How to Use Multiples to Estimate Your Value

Step 1: Know Your Earnings

Calculate your SDE (if your business does under $1M in earnings) or EBITDA (if above). Start with your P&L and add back:

• Owner's salary and benefits
• One-time or non-recurring expenses
• Personal expenses run through the business
• Depreciation and amortization (for EBITDA)

Be honest with yourself. Buyers will verify every add-back during diligence.

Step 2: Find Your Industry Multiple

Browse the valuation multiples guide and find your industry. Each listing shows the SDE multiple, revenue multiple, and whether the business is SBA-eligible. You can use the built-in calculator to get a quick estimate based on your earnings.

Step 3: Adjust for Your Situation

The published multiple is a median — half of businesses sell above it, half below. Adjust up or down based on:

Factors that increase your multiple:

• Revenue growing 15%+ annually
• Recurring or contract-based revenue (40%+ of total)
• No single customer over 10% of revenue
• Management team that operates without you
• Clean, accrual-basis financials
• Proprietary product, technology, or process
• Strong online reputation and brand

Factors that decrease your multiple:

• Flat or declining revenue
• Heavy owner dependence
• Customer concentration (one client is 20%+ of revenue)
• Cash-basis or messy accounting
• Industry headwinds
• Deferred maintenance or capex needs
• Key employee risk

Step 4: Get a Professional Opinion

Multiples give you a range, not a number. A professional valuation — whether a formal appraisal or a broker's opinion of value — accounts for the specific factors that make your business unique. It's the difference between Zillow and an actual home appraisal.

Common Mistakes When Using Multiples

Using the wrong earnings metric. Applying an EBITDA multiple to SDE (or vice versa) will give you a wildly inaccurate number. SDE includes owner compensation; EBITDA doesn't. Make sure you're matching the right metric to the right multiple.

Ignoring size adjustments. A $500K SDE business does not sell at the same multiple as a $3M EBITDA business in the same industry. Larger businesses command higher multiples because they're less risky, more institutional, and attract more buyers.

Cherry-picking comparable sales. Every owner has heard about the competitor who sold for 8x. Maybe they did — but that doesn't mean your business will. Look at the median, not the outlier.

Forgetting about deal structure. A 5x multiple paid as 60% cash, 20% earnout, and 20% seller note is not the same as 5x all-cash. The headline multiple can be misleading if the structure is unfavorable. Always evaluate the total deal terms, not just the multiple.

What This Means for Your Exit Planning

If you're thinking about selling in the next 1–3 years, the current environment is favorable for prepared sellers. Buyer activity is strong, financing is available, and quality businesses are commanding premium multiples.

The emphasis is on prepared. The businesses that sell quickly and at the best multiples in 2026 share common traits: clean financials, diversified revenue, strong teams, and documented operations. If your business has gaps in any of those areas, now is the time to address them — not when you're under LOI.

Start with the valuation multiples guide to understand your baseline, then schedule a call if you want a personalized assessment of where your business stands.