What's a Reasonable EBITDA Multiple? By Industry — and Mostly by Size

Short answer: a company earning around $1M in EBITDA reasonably sells for 4–6x. At $10M in EBITDA, 7–8.5x. At $100M, you're into double digits. The 2026 Pepperdine Private Capital Markets Report pegs sub-$1M-EBITDA companies at roughly 4–5x, and GF Data's deal averages climb from 6.4x at $10–25M enterprise value to 10.3x at $100–250M. Same math, same spreadsheet, very different answer — and the variable doing most of the work isn't your industry. It's your size.

That surprises almost every owner we hear from. Everyone wants to know the multiple "for my industry." Industry matters — we'll get to it — but the honest ranking is: size first, then quality, then industry. Here's how the ladder works, and why.

The size ladder, rung by rung

~$1M EBITDA. Your buyers are individuals, search funds, and small PE platforms doing add-ons. Most of them need an SBA loan or heavy seller financing, which caps what they can pay — the bank, not the buyer, often sets the ceiling. Pepperdine's 2026 survey data puts this tier around 4–5x; a clean business with growth can stretch toward 6x. Per the IBBA's Q1 2026 Market Pulse, deals in the $5M–$50M price bracket averaged 4.5x, and everything below that traded lower.

~$10M EBITDA. Different planet. Now professional buyers compete: mid-market PE funds, family offices, strategic acquirers. Your banker runs an auction instead of a listing. GF Data's averages for this territory run 6.4x–8.3x depending on deal size, and Pepperdine puts $10M+ EBITDA companies at 7–8.5x. The Pepperdine report notes a clear inflection around $5M EBITDA — below it, good companies chase scarce capital; above it, capital chases scarce companies.

~$100M EBITDA. You've outgrown surveys. Buyers are large-cap PE and public strategics pricing you against public comparables, and GF Data already shows 10.3x average at $100–250M of enterprise value. Double-digit multiples stop being a stretch and start being the opening bid.

Why the multiple expands with size

Risk falls. A $1M-EBITDA business usually has one location, a handful of key customers, and an owner whose vacation is a business risk. A $10M-EBITDA business has a management team, diversified revenue, and systems. Buyers pay more per dollar of profit when the dollars are safer — a multiple is just risk priced in reverse.

The buyer pool widens. Almost nobody can write a $100M check, but the people who can are numerous, professional, and under pressure to deploy capital. Meanwhile a $2M business is too big for most individuals and too small for most funds. Fewer bidders, softer price. It's that unglamorous.

Capital gets cheaper. The small buyer brings an SBA 7(a) loan at prime-plus and a personal guarantee. The mid-market fund brings bank debt at better spreads plus institutional equity. Cheaper financing means a buyer can pay more and still hit their return target. Same business, different math on the other side of the table.

Competition does the rest. Above roughly $5M EBITDA, Pepperdine's data shows capital competing for companies rather than the reverse. Auctions with five term sheets end differently than listings with one.

Industry matters — a full turn or two of EBITDA

Within the $10M–$250M market, GF Data's full-year 2025 averages (as compiled in CIBC's U.S. Middle Market M&A Monitor) spread like this:

Down on main street, industry shows up the same way: BizBuySell's Q2 2026 median across all closed sales was 2.7x cash flow, with restaurants below the line, and route businesses and professional practices above it. So yes — industry is worth a turn or two of EBITDA. Size is worth five.

First, make sure you're even speaking the same language: SDE vs. EBITDA

Small-business multiples are quoted on SDE — seller's discretionary earnings, which is profit plus the owner's salary, perks, and one-time add-backs, because the assumption is the buyer replaces you and keeps your paycheck. Mid-market multiples are quoted on EBITDA, which assumes a market-rate manager is hired to do your job. SDE is always the bigger number, so its multiple is always smaller. When a broker says "businesses like yours sell for 4x" — ask, 4x of what? It changes the price by six figures. (It also changes their commission, so ask twice.)

What moves your multiple inside the range

Within any size tier, the spread between the bottom and top of the range is mostly these five, in rough order of weight. Recurring revenue: contracts and subscriptions beat re-won work every year; it's the single biggest quality lever. Customer concentration: one customer over 20–30% of revenue and buyers start discounting or structuring around it with earnouts. Growth: a business growing 15% a year is buying its acquirer a cheaper effective multiple every month. Owner dependence: if the customers, the pricing, and the passwords all live in your head, the buyer is buying a job, and jobs trade cheap. Clean books: every add-back you can't document gets valued at zero — and multiplied by zero.

None of this is exotic. It's also why two businesses in the same industry, same town, same revenue can sell a full turn apart — and why a broker who quotes you a multiple before seeing your financials is telling you what you want to hear, not what the market will pay. For a first pass on your own numbers, our valuation calculator uses these same market medians; for how the sale actually unfolds from there, see how long it takes to sell a business.

FAQ

What is a reasonable EBITDA multiple for a small business?

Around $1M of EBITDA, 4–6x is the realistic 2026 range — Pepperdine's survey puts sub-$1M-EBITDA companies at about 4–5x. Owner-operated businesses below that usually trade on SDE at 2–3x; BizBuySell's Q2 2026 median was 2.7x.

Why do bigger companies sell for higher multiples?

Lower risk, deeper management, more buyers competing, and cheaper capital — all four compound. GF Data's averages climb from 6.4x at $10–25M of enterprise value to 10.3x at $100–250M.

Is EBITDA the same as SDE?

No. SDE adds the owner's pay back in; EBITDA subtracts a market-rate manager. SDE is the bigger base, so its multiple runs lower. Always ask "multiple of what?" before comparing quotes.