Insights

What multiple do UK businesses sell for?

Ask what multiple UK businesses sell for and you will usually get a single number that is wrong in both directions. The honest answer is a range: most UK SMEs change hands at between 3 and 6 times normalised EBITDA, with asset-heavy and owner-dependent businesses below that band and businesses with recurring revenue, scale or consolidator interest above it.

This guide sets out the typical ranges by sector, what actually moves a multiple, and the part of the calculation that matters more than the multiple itself.

Typical UK SME multiples by sector

These are indicative ranges for established, profitable UK SMEs with turnovers between £500,000 and £20 million, based on the transaction evidence we see. Individual businesses regularly fall outside them, for reasons covered below.

Two warnings about any table like this. First, the ranges describe multiples of normalised EBITDA — profit after correcting the owner's remuneration to a market rate and stripping out one-off and personal costs. Applying a market multiple to an unadjusted profit figure produces a wrong answer with confidence. Second, sector is only the starting point: a well-run business in a 3x sector can out-price a mediocre business in a 6x sector.

What moves a multiple up

Recurring and contracted revenue. A consultancy on retainers, a service business on maintenance contracts, or any business where next year's revenue is substantially visible commands a premium over one that starts each year at zero.

A business that runs without its owner. The single biggest driver at the smaller end. A management team, documented systems and customer relationships that don't route through one person all push the multiple up; a business that is really a well-paid job pushes it down sharply.

Consolidator and trade interest. Sectors being actively rolled up — care, dental, vets, accountancy, IT services — attract buyers who pay strategic rather than financial prices. This is why healthcare multiples sit so far above retail.

Scale. Multiples step up with size. A business making £2 million EBITDA typically commands a materially higher multiple than one making £200,000, because it is investable for a wider pool of buyers, including private equity.

Quality of earnings. Clean accounts, a diversified customer base (no customer above roughly 15–20% of revenue), and margins stable across three years all support the top of the range.

What moves a multiple down

Owner dependence, customer concentration, declining or erratic profits, short leases on key premises, sectors in structural decline, and any story a buyer's due diligence will unpick. It is common for a headline multiple agreed at offer stage to be negotiated down once these surface — which is an argument for knowing about them, with a figure attached, before a buyer finds them.

The multiple is half the sum. The other half is argued over more.

Price equals multiple times earnings, and in practice the earnings figure is where deals are won and lost. Normalisation — correcting the owner's salary to the market cost of replacing them, removing family members on the payroll above market rate, stripping personal vehicles, one-off legal costs and lockdown-era distortions — routinely moves the profit figure by 20–50% in either direction. A £400,000 reported profit that normalises to £300,000 at a 4x multiple is a £1.2 million business, not a £1.6 million one. This is where an independent valuation earns its fee: the multiple can be looked up; the normalisation takes judgement and evidence.

Common questions

What is the average multiple for a small business in the UK?

Most established UK SMEs sell for 3x–6x normalised EBITDA. Very small or owner-dependent businesses often transact at 2x–3x, sometimes expressed instead as a multiple of seller's discretionary earnings.

Are multiples applied to turnover or profit?

Profit — normally normalised EBITDA for SMEs. Revenue multiples are used in some sectors (software, some agencies and practices) as a cross-check, but a turnover multiple applied blindly ignores whether the business actually makes money.

Do multiples change over time?

Yes. They move with interest rates, debt availability, sector sentiment and consolidator activity. A valuation should rest on current comparable transactions, not a table from three years ago — one reason we benchmark every valuation against recent deals in the client's sector.

My competitor sold for 8x. Why is my business valued at 4x?

Usually one of: their earnings were normalised differently, they had scale or contracts you don't, the 8x figure grew in the retelling, or a strategic buyer paid for synergies specific to them. Headline multiples from the trade press are marketing; the multiples that matter come from verified transaction data.

How do I find out the right multiple for my business?

An independent valuation. We triangulate a normalised-EBITDA multiple against a net asset valuation and, where the figures support it, a discounted cash flow — benchmarked against real transactions in your sector. Fixed fee, typically £495, delivered within 72 hours.

The Business Valuers provides independent, fixed-fee valuations for UK SMEs with turnovers from £500,000 to £20 million. We do not sell businesses, so the figure carries no incentive to flatter. The ranges above are indicative market observations, not a valuation of any specific business.

For a fixed quote on your business, get in touch.