Question

What’s a typical multiple for selling a business?

Answer

Business sale multiples vary by industry, size, and profitability. Small businesses with under $5 million in revenue typically sell at two to four times EBITDA, middle-market companies at four to eight times, and larger businesses at eight to 15 times. Recurring-revenue software companies command the highest multiples, often five to 10 times revenue or more. Multiples generally increase with faster growth, recurring revenue, strong management, client diversification, and clean financials. If you’re planning a sale, a wealth advisor and business valuation specialist can help you understand where your company falls and identify potential opportunities to enhance value before you go to market.

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