Sector multiples
UK business valuation multiples by sector (2026)
Most UK SMEs sell for a multiple of normalised EBITDA. The table below shows indicative market ranges for the size of business we value, turnover £500k to £20 million. Where a specific business sits within its range depends on earnings quality, customer concentration, recurring revenue, management depth and growth. A multiple applied to the wrong earnings figure gives the wrong answer, which is why every valuation we produce starts by normalising EBITDA before any multiple is applied.
| Basis | / | What moves it | |
|---|---|---|---|
| Software & SaaS | EBITDA | 6× – 12× | Net revenue retention and gross margin |
| Holiday & caravan parks | Adjusted EBITDA | 7× – 10× | Security of pitch and site fee income |
| Veterinary practices | Adjusted EBITDA | 6× – 10× | Vet retention and health plan income |
| Care homes & supported living | Adjusted EBITDA | 6× – 10× | Occupancy, fee mix and CQC rating |
| IT managed services (MSPs) | Adjusted EBITDA | 3× – 8× | Contracted MRR and seat churn |
| Hotels & guest houses | Adjusted EBITDA | 5× – 8× | Occupancy, ADR and capex backlog |
| Nurseries & childcare | Adjusted EBITDA | 5× – 8× | Occupancy, funded-hours mix and staff ratios |
| Community pharmacy | Adjusted EBITDA | 5× – 8× | Monthly item volume and locum cost |
| Dental practices | Adjusted EBITDA | 5× – 8× | NHS/private mix and associate dependence |
| B2B & professional services | Adjusted EBITDA | 4× – 7× | Contracted versus project income |
| Optical practices | Adjusted EBITDA | 4× – 7× | Private dispensing margin and lease terms |
| Funeral directors | SDE / EBITDA | 3× – 6.5× | Annual call volume trend and plan liabilities |
| Manufacturing & engineering | Adjusted EBITDA | 4× – 6× | Order book, plant value and customer concentration |
| Marketing & creative agencies | Adjusted EBITDA | 3× – 6× | Retained versus project fees and client tenure |
| Recruitment agencies | Adjusted EBITDA | 3× – 6× | Perm/temp mix and consultant productivity |
| Estate & letting agencies | Adjusted EBITDA | 2.5× – 6× | Size and retention of the managed lettings book |
| Wholesale & distribution | Adjusted EBITDA | 3.5× – 5.5× | Supplier agreements, margin and working capital |
| Cleaning & facilities | SDE / EBITDA | 2× – 5× | Contract length, retention and site-level margin |
| Haulage & logistics | Adjusted EBITDA | 3× – 5× | Contracted work and fleet value net of finance |
| E-commerce & D2C | SDE / EBITDA | 2.5× – 5× | Contribution margin and channel concentration |
| Construction & contracting | Adjusted EBITDA | 2.5× – 4.5× | Secured order book, retentions and WIP |
| Garages & MOT stations | SDE / EBITDA | 2× – 4× | Labour recovery rate and technician retention |
| Retail (bricks and mortar) | SDE / EBITDA | 2× – 4× | Lease terms, footfall and stock turn |
| Pubs & restaurants | Adjusted EBITDA | 2× – 4× | Tenure and adjusted trading profit |
| Accountancy practices | Recurring fees | 0.8× – 1.3× | Fee retention and advisory mix (× gross recurring fees) |
| Start-ups & early stage | EBITDA | Method-led | Valued on method, not multiples — funding round, DCF or asset basis |
Indicative UK SME market ranges, reviewed August 2026. Smaller businesses and owner-dependent businesses sit toward the bottom of each range or below it.
Why normalised EBITDA, not reported profit
Reported profit almost never equals what a buyer will actually inherit. We add back owner remuneration above market rate, strip out one-off items, and adjust related-party charges so the earnings figure the multiple is applied to reflects the ongoing business.
When a multiple isn't the right method
Asset-heavy businesses (property, plant, held stock) are valued on a net asset basis instead. Businesses with strong contracted future cash flows use a discounted cash flow as a cross-check. In every case the earnings multiple sits alongside the other two methods, not on its own.
What moves a business up its range
The three levers that shift a business toward the top of its sector range are a spread customer base (no single customer above ~15% of revenue), meaningful recurring revenue, and a management team that runs the business without the owner in it day to day.
Common questions
What multiple is my business worth?
Most UK SMEs trade at 2x–8x normalised EBITDA depending on sector, size and quality of earnings. Owner-managed retail and hospitality businesses sit at the low end; IT services, healthcare and specialist B2B services sit at the top. The figure only means anything when the earnings it is applied to have been properly normalised first.
What is a normalised EBITDA multiple?
It is a market multiple applied to your earnings after adjustments for items a buyer would not inherit — owner remuneration above market rate, one-off costs, related-party charges and non-recurring income. Reported EBITDA on its own almost always overstates or understates true maintainable earnings, so applying a multiple to it produces the wrong answer.
Do smaller businesses get lower multiples?
Yes. Smaller businesses carry more risk per pound of profit — greater owner dependence, thinner management, fewer customers — so the same sector will price a £300k EBITDA business below a £3m one. Businesses with turnover under £500k typically sit at or below the bottom of the ranges shown on this page.
Related: how much a business valuation costs, and how much your business is worth.
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