How many times revenue is a small business worth? Most small businesses sell for 0.3x to 0.8x their annual revenue, with a median around 0.55x. But revenue multiples vary widely by industry — and they are only one piece of the puzzle.
The tables below show typical revenue multiples across 80+ industries, based on comparable transaction data from small business sales. Each table shows the median multiple (the midpoint of actual transactions) and the typical range (25th to 75th percentile), so you can see not just the average but how wide the spread is in your industry.
Revenue multiples are a useful starting point, but they have a major limitation: they ignore profitability. For a more accurate valuation, buyers and professional appraisers use Seller's Discretionary Earnings (SDE) multiples. See our SDE multiples by industry page for that data.
In This Article
- How Much Is a Business Worth Based on Revenue?
- Construction and Trades
- Food and Restaurants
- Retail
- Service Businesses
- Health Care
- Automotive
- Manufacturing and Distribution
- Other Industries
- Why Revenue Multiples Are Not Enough
- Frequently Asked Questions
How Much Is a Business Worth Based on Revenue?
A common rule of thumb is that a small business is worth roughly half its annual revenue. But what does that look like in practice? Here are worked examples at four revenue levels, using the median revenue multiple of 0.55x:
| Annual Revenue | Low Estimate (0.3x) | Median Estimate (0.55x) | High Estimate (0.8x) |
|---|---|---|---|
| $250,000 | $75,000 | $137,500 | $200,000 |
| $500,000 | $150,000 | $275,000 | $400,000 |
| $1,000,000 | $300,000 | $550,000 | $800,000 |
| $5,000,000 | $1,500,000 | $2,750,000 | $4,000,000 |
These are rough estimates. Your actual business value depends on profitability, industry, growth trajectory, and many other factors. For a more accurate picture, see our complete valuation guide or try the free valuation calculator.
Construction and Trades
| Industry | Median Multiple | Typical Range |
|---|---|---|
| Painters | 0.62x | 0.59x – 0.70x |
| Flooring | 0.60x | 0.57x – 0.73x |
| General Contractors | 0.60x | 0.55x – 0.67x |
| Electrical Contractors | 0.59x | 0.50x – 0.65x |
| Roofing | 0.59x | 0.52x – 0.63x |
| Custom Cabinets | 0.57x | 0.49x – 0.64x |
| Plumbing | 0.56x | 0.46x – 0.65x |
| Construction (General) | 0.56x | 0.53x – 0.63x |
| Paving | 0.55x | 0.49x – 0.64x |
| Sheet Metal | 0.50x | 0.47x – 0.54x |
Food and Restaurants
| Industry | Median Multiple | Typical Range |
|---|---|---|
| Ice Cream & Frozen Treats | 0.70x | 0.57x – 0.90x |
| Catering | 0.60x | 0.58x – 0.70x |
| Food Distribution | 0.59x | 0.51x – 0.63x |
| Full-Service Restaurants | 0.55x | 0.40x – 0.69x |
| Coffee Shops | 0.54x | 0.47x – 0.61x |
| Quick-Service & Fast Food | 0.52x | 0.38x – 0.65x |
| Bakeries | 0.49x | 0.38x – 0.62x |
| Bars & Pubs | 0.47x | 0.30x – 0.56x |
| Grocery & Deli | 0.44x | 0.22x – 0.64x |
Retail
| Industry | Median Multiple | Typical Range |
|---|---|---|
| Tobacco & Smoke Shops | 0.65x | 0.59x – 0.70x |
| Florists | 0.60x | 0.53x – 0.68x |
| Tile & Hardwood | 0.57x | 0.51x – 0.68x |
| Pet Stores | 0.57x | 0.41x – 0.64x |
| Pharmacies | 0.56x | 0.55x – 0.68x |
| Hobby Shops | 0.55x | 0.53x – 0.58x |
| Womens Clothing | 0.54x | 0.28x – 0.71x |
| Eye Care & Glasses | 0.54x | 0.52x – 0.60x |
| Sporting Goods | 0.51x | 0.34x – 0.56x |
| Convenience Stores | 0.50x | 0.38x – 0.72x |
| Wholesale Jewelry | 0.50x | 0.37x – 0.56x |
| Furniture Stores | 0.47x | 0.41x – 0.52x |
| Gift Shops | 0.41x | 0.40x – 0.46x |
| Liquor Stores | 0.35x | 0.19x – 0.46x |
Service Businesses
| Industry | Median Multiple | Typical Range |
|---|---|---|
| Healthcare Billing | 0.65x | 0.53x – 0.72x |
| Temp Staffing | 0.64x | 0.57x – 0.83x |
| Property Management | 0.63x | 0.52x – 0.71x |
| Dry Cleaners | 0.61x | 0.51x – 0.67x |
| Locksmith | 0.59x | 0.52x – 0.72x |
| Pest Control | 0.59x | 0.54x – 0.62x |
| Home Inspection | 0.59x | 0.54x – 0.70x |
| Cleaning Services | 0.57x | 0.47x – 0.66x |
| Lawn Care & Landscaping | 0.57x | 0.45x – 0.68x |
| Advertising & Marketing | 0.57x | 0.49x – 0.72x |
| Laundromats | 0.56x | 0.52x – 0.76x |
| Carpet Cleaning | 0.54x | 0.47x – 0.58x |
| Salons | 0.53x | 0.39x – 0.70x |
| Pressure Washing & Pool Service | 0.50x | 0.43x – 0.62x |
Health Care
| Industry | Median Multiple | Typical Range |
|---|---|---|
| Dental Practices | 0.60x | 0.52x – 0.63x |
| In-Home Care | 0.57x | 0.45x – 0.63x |
| Physical Therapy | 0.56x | 0.38x – 0.66x |
| Medical Practices | 0.55x | 0.48x – 0.75x |
Automotive
| Industry | Median Multiple | Typical Range |
|---|---|---|
| Auto Parts | 0.64x | 0.40x – 0.67x |
| Tire Stores | 0.62x | 0.38x – 0.69x |
| Auto Repair & Service | 0.59x | 0.39x – 0.69x |
| Towing | 0.59x | 0.52x – 0.65x |
| Car Washes | 0.58x | 0.51x – 0.67x |
| Auto Detailing | 0.52x | 0.46x – 0.60x |
| Boat Dealers | 0.24x | 0.17x – 0.30x |
Manufacturing and Distribution
| Industry | Median Multiple | Typical Range |
|---|---|---|
| Custom Signs | 0.65x | 0.60x – 0.75x |
| Metal Fabrication | 0.61x | 0.41x – 0.70x |
| Machine Shops | 0.59x | 0.53x – 0.66x |
| Distribution | 0.57x | 0.46x – 0.73x |
| Metal Recycling | 0.50x | 0.46x – 0.59x |
| Print Shops | 0.49x | 0.43x – 0.63x |
Other Industries
| Industry | Median Multiple | Typical Range |
|---|---|---|
| Tutoring | 0.68x | 0.61x – 0.70x |
| RV Parks & Campgrounds | 0.67x | 0.64x – 0.69x |
| Computer Software | 0.65x | 0.60x – 0.81x |
| Moving Companies | 0.64x | 0.53x – 0.71x |
| Sports & Fitness Training | 0.62x | 0.53x – 0.73x |
| Insurance Agencies | 0.61x | 0.54x – 0.70x |
| Package Delivery | 0.61x | 0.48x – 0.69x |
| Event Planning | 0.60x | 0.56x – 0.71x |
| Pet Boarding & Daycare | 0.60x | 0.46x – 0.69x |
| Storage Companies | 0.60x | 0.47x – 0.68x |
| Tanning Salons | 0.60x | 0.55x – 0.67x |
| Shipping & Freight | 0.59x | 0.52x – 0.73x |
| Preschools & Day Care | 0.57x | 0.44x – 0.70x |
| Pawn Shops | 0.54x | 0.53x – 0.58x |
Why Revenue Multiples Are Not Enough
Revenue multiples are a useful shorthand, but they have a fundamental limitation: they tell you nothing about profitability.
Consider two restaurants, both generating $800,000 in annual revenue:
- Restaurant A has an SDE of $200,000 (25% margin). At a 2.3x SDE multiple, it's worth approximately $460,000.
- Restaurant B has an SDE of $80,000 (10% margin). At a 2.3x SDE multiple, it's worth approximately $184,000.
Both restaurants have the same revenue, but Restaurant A is worth 2.5x more than Restaurant B. A revenue multiple of 0.55x would have estimated both at $440,000 — significantly overvaluing one and slightly undervaluing the other.
This is why buyers and professional appraisers use Seller's Discretionary Earnings (SDE) as the primary valuation metric for small businesses. SDE accounts for all the cash flow available to a new owner, normalised for the financial quirks common in owner-operated businesses.
For SDE-based valuation data across 100+ industries, see our SDE multiples by industry page. For a complete explanation of how small business valuation works, read our valuation guide.
Frequently Asked Questions
How many times revenue is a small business worth?
Most small businesses sell for 0.3x to 0.8x their annual revenue, with a median around 0.55x. This means a business generating $1 million in revenue would typically sell for $300,000 to $800,000. However, revenue multiples vary significantly by industry, profitability, and other factors.
How much is a business worth with $500,000 in sales?
A business with $500,000 in annual sales is typically worth $150,000 to $400,000, depending on its industry and profitability. At the median revenue multiple of 0.55x, the estimate would be around $275,000. However, revenue-based estimates are less accurate than earnings-based methods. A business with $500,000 in sales and strong profit margins will be worth significantly more than one with the same revenue but thin margins.
How much is a business worth with $1 million in sales?
A business with $1 million in annual sales is typically worth $300,000 to $800,000 based on revenue multiples alone. The actual value depends heavily on profitability. For a more accurate estimate, buyers and appraisers use Seller's Discretionary Earnings (SDE) multiples, which account for how much cash flow the business actually generates.
Why are revenue multiples less reliable than SDE multiples?
Revenue multiples ignore profitability. Two businesses with identical revenue can have very different values if their profit margins differ. A business with $1 million in revenue and $300,000 in SDE is worth far more than one with $1 million in revenue and $50,000 in SDE. That is why buyers and professional appraisers prefer SDE multiples for small business valuations.
What is the difference between a revenue multiple and an earnings multiple?
A revenue multiple values a business as a ratio of its sale price to total annual sales. An earnings multiple (typically SDE for small businesses, or EBITDA for larger ones) values a business as a ratio of its sale price to its annual cash flow. Earnings multiples are more accurate because they reflect how much money the business actually generates for its owner.