Small Business Valuation Multiples, 2018 Edition

The valuation multiples presented in this

analysis are derived from actual market

transactions as reported by BIZCOMPSĀ®,with the primary focus on small businesses priced at less than $1 million. The selected valuation multiple range represents the midrange of the reported transactions. The average and

median both fall within this range, with the midpoint of the range closely approximating the median in most cases.

Additional Resources

BizcompsĀ® (www.bizcomps.com)

provides transaction data on over 12,424

small business sales transactions from a wide variety of industries. Primary focus is on small businesses priced at less than $1 million, with data available

in print and online versions. 

The price determined by these multiples includes intangible assets (such as trademarks, licenses, franchises, customer lists, and goodwill), and furniture, fixtures, and equipment. It does not include cash, accounts receivable, inventory, real estate, other tangible assets, or liabilities, so these items must be added or subtracted, as applicable, in arriving at the equity value of a business.

Price - Sales price paid for intangible assets and furniture, fixtures, and equipment.

Price/Revenue Multiple - Price divided by annual net sales.

Price/SDE Multiple - Price divided by seller's discretionary earnings (most recent year's net income before interest, taxes, depreciation, amortization, primary owner's compensation, and non-business related or nonrecurring income or expenses).