"What's a fair multiple to pay for a small business?" is one of the most common questions from first-time acquisition buyers — and the honest answer is: it depends entirely on the industry.

A 3x EBITDA multiple is expensive for a café but cheap for an accounting firm. A 5x multiple is reasonable for an IT managed services business but outrageous for a retail shop. Without industry context, the multiple number means nothing.

This guide covers acquisition multiple benchmarks across all 9 major SMB categories, including what drives higher multiples within each sector.

What is an acquisition multiple?

The acquisition multiple is asking price ÷ annual earnings (EBITDA or SDE):

Multiple = Asking Price ÷ Annual Earnings

A business earning $200,000/year at a 4x multiple is priced at $800,000.

Higher multiples reflect lower risk, stronger growth prospects, more recurring revenue, or barriers to entry. Lower multiples typically signal higher risk — cyclical demand, high owner dependency, low barriers to entry, or declining earnings.

Multiples by category

Professional Services: 2x – 7x

The highest-multiple category in SMB acquisitions, driven by recurring client relationships, high margins (20–45%), and low capital intensity.

| Industry | Typical Range | |----------|-------------| | Financial Advisory / Wealth Mgmt | 4–7x | | IT Services / MSP | 4–6x | | Accounting / Tax Practice | 3–5x | | Management Consulting | 3–5x | | Architecture / Engineering | 3–5x | | Legal Services | 2–4x | | Marketing / Digital Agency | 2–4x | | HR / Staffing Agency | 3–5x |

What drives higher multiples: Recurring revenue (retainer-based fees, managed services contracts), strong client retention, and clean handover potential. A practice with documented processes and no single-client concentration commands a premium.

Healthcare & Wellness: 2x – 5x

Healthcare businesses trade at strong multiples due to stable, needs-based demand and regulatory barriers to entry. Patient/client lists are valuable assets.

| Industry | Typical Range | |----------|-------------| | Dental Practice | 3–5x | | Medical Practice | 3–5x | | Optometry | 3–5x | | Psychology / Counselling | 2–4x | | Veterinary Practice | 3–5x | | Childcare / Early Education | 3–5x | | Physiotherapy / Allied Health | 2–4x | | Pharmacy | 2–4x | | Gym / Fitness Studio | 2–3x |

What drives higher multiples: Accreditation, established patient base, strong Google reviews, and non-bulk-billed revenue mix.

Food & Hospitality: 1x – 5x

The widest range of any category. Hospitality businesses trade at the lowest multiples due to high risk — thin margins, high staff turnover, volatile demand, and poor lease terms.

| Industry | Typical Range | |----------|-------------| | Food Manufacturing / Processing | 3–5x | | Catering Business | 2–3x | | Fast Food / QSR (Franchise) | 1–3x | | Bar / Pub | 1–3x | | Café / Coffee Shop | 1–2x | | Restaurant | 1–2x | | Bakery / Patisserie | 1–2x |

What drives higher multiples: Long lease term, strong brand, franchise model, consistent earnings over 3+ years. What kills the multiple: expiring lease, key-person chef, declining foot traffic.

Retail: 2x – 5x

Traditional retail trades at a discount to services due to inventory risk, online competition, and location dependency. eCommerce businesses command a premium within the category.

| Industry | Typical Range | |----------|-------------| | eCommerce / Online Retail | 3–5x | | Hardware / Trade Supplies | 2–4x | | Liquor Store | 2–4x | | Specialty Retail | 2–4x | | General Retail | 2–4x | | Auto Parts / Accessories | 2–4x | | Pet Store / Grooming | 2–4x |

What drives higher multiples: Proprietary products, strong brand, subscription or recurring revenue, digital sales channel.

Trade & Field Services: 2x – 5x

Trades businesses with contracted recurring work (commercial cleaning, pest control, pool services) trade at a premium over one-off project work.

| Industry | Typical Range | |----------|-------------| | Pool Services / Maintenance | 3–4x | | Pest Control | 3–5x | | HVAC / Refrigeration | 3–5x | | Commercial Cleaning | 3–5x | | Electrical Services | 2–4x | | Plumbing | 2–4x | | Landscaping | 2–4x | | Security Services | 3–5x | | Building / Construction | 3–4x |

What drives higher multiples: Maintenance contracts, government or commercial customers, licensed operators beyond the owner.

Manufacturing & Industrial: 2x – 5x

Manufacturing businesses trade at moderate multiples. Key risks include plant obsolescence, customer concentration, and commodity input exposure.

| Industry | Typical Range | |----------|-------------| | Engineering / Metal Fabrication | 3–5x | | Light Manufacturing | 3–5x | | Industrial Equipment Supplier | 3–5x | | Timber / Joinery | 2–4x | | Printing / Packaging | 2–4x |

Property & Real Estate: 2x – 8x

A wide range driven by the nature of the income. Property management agencies with long-term rent rolls command premium multiples. Self-storage facilities are the standout high-multiple asset in the SMB space.

| Industry | Typical Range | |----------|-------------| | Self-Storage Facility | 5–8x | | Property Management Agency | 3–5x | | Commercial Cleaning (Facilities) | 3–5x | | Real Estate Sales Agency | 2–4x |

Transport & Logistics: 2x – 4x

Lower multiples reflect higher capex (vehicles), fuel cost exposure, and margin compression from digital freight platforms.

Personal & Consumer Services: 1x – 5x

Laundromats are the standout within this category — asset-backed, relatively passive income, and commanding 3–4x multiples. Beauty and grooming businesses trade at the lower end due to high staff dependency.

| Industry | Typical Range | |----------|-------------| | Laundromat | 3–4x | | Car Wash / Detailing | 3–5x | | Funeral / Memorial Services | 3–5x | | Education / Tutoring Centre | 2–4x | | Auto Repair / Mechanic | 2–4x | | Beauty Salon / Barber | 1–3x | | Dry Cleaning | 2–3x |

Multiple vs DSCR: which matters more?

The acquisition multiple tells you whether the price is fair relative to earnings. But DSCR tells you whether you can afford the loan.

These two metrics can point in different directions. A fair multiple does not guarantee financing viability — especially if earnings are low or the LTV is high.

Always run both calculations before assessing a deal. BAS Tool's free calculator computes both simultaneously against your specific industry's benchmarks.

How to use multiples in negotiation

If a business is listed above the sector multiple ceiling:

Identify what justifies the premium (growing revenue, strong contracts, etc.)
Assess whether the premium is real or broker optimism
Use the multiple overhang as your negotiating anchor: "Your multiple of 6x is above the sector high of 5x. Help me understand what justifies the premium."

If a business is listed below the sector multiple floor:

It may be a bargain — investigate why
Most commonly: declining earnings, owner dependency, expiring lease, or customer concentration

Check any deal against industry multiple benchmarks with the free BAS calculator. See all 64 industry benchmarks on the industries page.

Small Business Acquisition Multiples by Industry: 2025 Guide