Industry sets the starting bracket. Business quality decides where inside it you land — and the spread within an industry is usually wider than the gap between industries.
Indicative EBITDA multiple brackets
- Professional services and agencies: 3.0–6.0x, higher with recurring retainers
- Software and SaaS: 8–15x EBITDA, or 3–8x ARR where growth is strong
- Healthcare and allied health clinics: 4.0–7.0x, driven by practitioner retention
- Manufacturing: 4.0–6.5x, with a capex allowance and asset backing
- Wholesale and distribution: 3.5–5.5x, sensitive to supplier agreements
- Retail and hospitality: 2.0–4.0x, lease terms often decisive
- Construction and trades: 2.5–4.5x, discounted for project concentration
- Transport and logistics: 3.5–5.5x, fleet condition matters
- E-commerce: 3.0–6.0x, depending on channel and customer acquisition cost
Treat these as brackets, not answers. They describe completed private transactions in normal market conditions and shift with interest rates and credit availability.
What pushes you to the top of the range
- Contracted or subscription revenue with visible renewal rates
- No customer above roughly 10% of revenue
- A management layer that runs the business without the owner
- Three years of consistent or improving gross margin
- Clean, reconciled accounts and documented processes
- Transferable assets: brand, IP, licences, long leases
What pushes you to the bottom
- Revenue that walks out the door with the owner's relationships
- One customer or one platform driving most sales
- Margins declining while revenue grows
- Deferred maintenance or ageing equipment
- Litigation, unresolved tax positions or missing records
Revenue multiples: use with care
Revenue multiples are only meaningful where margins are predictable across the industry, such as software or agency work. In a business earning 4% net margin, a 0.8x revenue multiple implies a 20x earnings multiple — a number no buyer would pay. Always convert a revenue multiple back to earnings before you believe it.
Size premium is real
The same business earning $2m of EBITDA typically attracts one to two more turns than one earning $250k. Larger businesses are less owner-dependent, easier to finance, and open to a wider pool of buyers including private equity. Growing into the next size bracket can be worth more than improving margin.