50+ Business Valuation Statistics Every Owner Should Know (2026)

The average SDE (Seller’s Discretionary Earnings) multiple across all 57 tracked industries is 2.62x. This is the standard valuation metric for small businesses with under $5M in earnings.

Source: bzwrth.com Q1 2026 transaction data

HVAC businesses command the highest median SDE multiple of any industry tracked at 3.51x, driven by recurring maintenance contracts, essential-service demand, and strong buyer interest from private equity.

Source: bzwrth.com Q1 2026 transaction data

Painting contractors trade at the lowest median SDE multiple of 2.12x, reflecting the project-based, owner-dependent nature of most painting businesses and lower barriers to entry.

Source: bzwrth.com Q1 2026 transaction data

26 of 57 tracked industries (46%) have sufficient transaction volume to report EBITDA multiples. EBITDA multiples are typically used for larger businesses with $1M+ in earnings and a management team in place.

Source: bzwrth.com Q1 2026 transaction data

The most common SDE multiple range across all industries. 32 of 57 industries (56%) have median SDE multiples between 2.50x and 2.59x, making this the gravitational center of small business valuations.

Source: bzwrth.com Q1 2026 transaction data

Only 4 of 57 industries (7%) have median SDE multiples above 3.0x: HVAC (3.51x), IT Managed Services (3.50x), Septic Services (3.06x), and Waste Hauling (3.06x). Getting above a 3x multiple requires strong recurring revenue or essential-service positioning.

Source: bzwrth.com Q1 2026 transaction data

Of the 26 industries with EBITDA data, 8 (30.8%) have EBITDA multiples above 5.0x. The highest is Home Health Care at 12.44x, followed by Senior Living at 11.50x — both driven by demographic tailwinds and regulatory barriers to entry.

Source: bzwrth.com Q1 2026 transaction data

The average EBITDA multiple across all 26 industries with data is 5.38x — roughly double the average SDE multiple. The gap reflects the size premium: businesses large enough to report EBITDA typically have management teams, which reduces buyer risk.

Source: bzwrth.com Q1 2026 transaction data

HVAC has the widest SDE multiple range of any industry, spanning from 1.90x to 6.60x — a 4.70x spread. The difference between the low and high end is almost entirely explained by recurring revenue, owner dependency, and business size.

Source: bzwrth.com Q1 2026 transaction data

Pest Control has the narrowest SDE multiple range at 2.34x to 2.90x (0.56x spread). The tight range reflects the industry’s consistent business model: recurring contracts, predictable revenue, and standardized service delivery across operators.

Source: bzwrth.com Q1 2026 transaction data

The gap between the highest-valued category (Healthcare, 2.80x) and the lowest (Wholesale, 2.50x) is only 0.30x SDE. Category matters less than individual business characteristics — a well-run wholesale distributor with recurring contracts can outperform a poorly managed healthcare business.

Source: bzwrth.com Q1 2026 transaction data

Businesses with 50%+ recurring revenue sell at 30–40% higher multiples than project-based businesses in the same industry. Recurring revenue is the single most powerful multiple booster.

Source: M&A industry research; bzwrth value driver analysis

Owner-dependent businesses — where the owner is the primary salesperson, technician, or relationship holder — sell for 20–35% less than businesses with management teams that operate independently.

Source: M&A industry research; bzwrth value driver analysis

Customer concentration above 25% typically results in a 15–30% discount to the sale multiple. Losing a single large customer post-acquisition is a top buyer concern.

Source: M&A industry research; buyer risk analysis

Businesses with 3+ years of consistent revenue growth command 15–25% premiums. Buyers pay for momentum — declining revenue can cut your multiple in half.

Source: M&A industry research; transaction trend analysis

Clean, CPA-reviewed financial documentation can add 15–25% to sale price. Messy books are the number one reason deals fall apart during due diligence.

Source: M&A industry research; due diligence failure analysis

Businesses operating 10+ years command a longevity premium. A long track record proves the business model survives economic cycles, management transitions, and competitive shifts.

Source: M&A industry research

Documented systems and Standard Operating Procedures reduce buyer-perceived transition risk. Undocumented “tribal knowledge” businesses are harder to sell and command lower multiples.

Source: M&A industry research; buyer survey data

SDE is the standard valuation metric for businesses under $5M in earnings. Above that threshold, EBITDA becomes the norm — and multiples jump significantly as institutional buyers enter the market.

Source: IBBA/M&A Source market standards

Businesses with $1M+ in SDE receive approximately 18% higher multiples than those under $100K in SDE. Size reduces risk — larger businesses are less owner-dependent and more resilient.

Source: bzwrth.com size adjustment model; transaction data

The total value driver adjustment can swing an industry’s base multiple by -60% to +80%. A 2.50x industry multiple can range from an effective 1.00x (worst case) to 4.50x (best case) depending on business-specific factors.

Source: bzwrth.com valuation model; Q1 2026 calibration

The average time to sell a small business is 6–12 months from listing to close. Businesses that are well-prepared before going to market tend to close faster and at higher multiples.

Source: IBBA/M&A Source market data

The average business broker commission is 8–12% for businesses selling under $2M. Commission rates typically decline for larger transactions, dropping to 4–6% for businesses over $5M.

Source: IBBA broker compensation survey

Approximately 30–40% of small business deals include an earnout component — a portion of the purchase price contingent on post-sale business performance. Earnouts are more common when there is a gap between buyer and seller on valuation.

Source: M&A industry research; deal structure analysis

The average seller transition period is 3–12 months. Buyers want the seller to stay on to transfer relationships, train staff, and ensure continuity. Longer transitions are common for owner-dependent businesses.

Source: M&A industry research

An estimated 30–50% of small business deals that reach the due diligence stage ultimately fall apart. The top reasons: financial discrepancies, undisclosed liabilities, and loss of key customers during the process.

Source: M&A industry research; broker surveys

SBA loans finance approximately 50% of small business acquisitions under $5M. The SBA 7(a) program is the most common financing vehicle, allowing buyers to purchase with as little as 10–20% down.

Source: SBA lending data; IBBA transaction surveys

The most common deal structure for small businesses is an asset sale, accounting for 80–90% of transactions. Stock sales are more common for larger companies and C-corporations where tax implications favor the buyer.

Source: M&A industry research; transaction structure analysis

75% of business owners who sell regret the decision within 12 months. The primary drivers of regret: lack of purpose, selling too early, and not having a post-exit plan.

Source: Exit Planning Institute

Only 20–30% of businesses listed for sale actually close a transaction. The rest are withdrawn, expire, or fail during negotiations. Preparation is the strongest predictor of whether a deal closes.

Source: BizBuySell; IBBA market data

The average business owner has 80% of their personal net worth tied up in their business. This concentration of wealth makes the exit decision both high-stakes and emotionally charged.

Source: Exit Planning Institute

Owners who prepare 12+ months in advance of going to market achieve 20–30% better outcomes (higher multiples, faster closes, fewer deal failures) compared to owners who list reactively.

Source: M&A industry research; exit planning outcome studies