The most common question I get from business owners isn’t "should I sell?" It’s "what multiple will I get?"
That question matters — and the answer is more nuanced than most people expect. The multiple your business commands depends on your industry, your specific business characteristics, deal structure, and the quality of the process you run. But industry benchmarks give you a realistic starting point.
Here’s what we’re seeing in the lower middle market in 2026.
A Quick Note on EBITDA Multiples
EBITDA multiple is the most common valuation framework for businesses in the $3M–$50M revenue range. The formula is straightforward: Business Value = Adjusted EBITDA × Multiple.
"Adjusted" is the important word. Your EBITDA gets normalized — owner salary above market rate, personal expenses, one-time costs, and other items that won’t continue under new ownership get added back. The resulting "adjusted EBITDA" represents the true cash flow a buyer is acquiring.
The multiple applied to that number reflects market conditions, industry dynamics, and your specific business profile. Two businesses in the same industry with the same revenue can have very different multiples — and understanding why is the key to maximizing your outcome.
2026 EBITDA Multiples by Industry
These ranges reflect lower middle market transactions — businesses with $3M to $50M in revenue and $500K to $10M+ in EBITDA. Larger businesses (above $10M EBITDA) typically command premium multiples within each range.
Professional Services (B2B)
Typical range: 4–7x EBITDA
Accounting firms, engineering firms, consulting, staffing, marketing agencies. Recurring client relationships, contract revenue, and the ability to demonstrate that clients stay after the owner exits drive the high end of the range. Owner-dependent practices with no junior talent trade at 3–4x. Firms with strong recurring revenue and a real management layer trade at 6–7x.
Healthcare and Healthcare-Adjacent
Typical range: 5–9x EBITDA
One of the most active and highly valued sectors in lower middle market M&A. Strong demand from strategic buyers and private equity roll-up platforms. Dental practices, behavioral health, physical therapy, home health, and specialty clinics all see strong buyer interest. Revenue quality (payor mix, contract relationships), regulatory clean bill of health, and operator-independence drive the top of the range. Businesses heavily dependent on a single physician or clinician trade at a discount.
Technology-Enabled Services / SaaS
Typical range: 5–10x EBITDA (recurring revenue businesses may be valued on ARR)
The recurring revenue premium is real. A business with 70%+ of revenue under subscription or long-term contract commands meaningfully higher multiples than one doing project-based work. Growth rate matters significantly here — a business growing 20%+ annually is valued very differently from one that’s flat. Bootstrapped SaaS businesses and tech-enabled service companies are among the most sought-after assets in the lower middle market.
Business Services and Outsourcing
Typical range: 4–7x EBITDA
Facilities management, commercial cleaning, security services, HR outsourcing, payroll, logistics. Businesses with long-term contracts and low customer churn sit at the high end. Project-based or spot work trades at the low end. Customer concentration is a frequent value detractor in this category.
Trades and Specialty Contractors
Typical range: 3–6x EBITDA
HVAC, plumbing, electrical, roofing, landscaping, pest control. Residential trades trade lower (3–4x); commercial and industrial trades with recurring service agreements trade higher (5–6x). Route density, geographic focus, and the presence of a service contract base are the key value drivers. Owner-operators who are the lead tech or the primary sales driver face a significant multiple discount — buyers have to factor in the cost of replacing that function.
Distribution and Wholesale
Typical range: 3–5x EBITDA
Margins matter more than revenue in distribution. A business doing $20M in revenue at 8% EBITDA margin is more valuable than one doing $30M at 4%. Exclusive supplier relationships, specialized product categories, and long-term customer contracts drive the top of the range. Commodity distribution with easily replicated supplier relationships trades at the low end.
Manufacturing and Light Industrial
Typical range: 4–6x EBITDA
Contract manufacturers, specialty fabricators, value-added manufacturers. Proprietary products, long-term OEM relationships, and hard-to-replicate capabilities drive premium multiples. Commodity manufacturing with customer concentration trades near the bottom. Capital intensity matters — buyers factor in upcoming capex requirements.
Consumer and Retail
Typical range: 3–5x EBITDA
Highly variable based on brand strength, channel mix, and growth trajectory. Direct-to-consumer businesses with strong digital channels and recurring customers trade higher. Brick-and-mortar retail with lease concentration trades at the low end. E-commerce businesses with proven unit economics and diversified acquisition channels are attractive to strategic buyers.
Food Service and Hospitality
Typical range: 3–5x EBITDA
Multi-unit concepts, franchise operations, and catering businesses with scalable infrastructure attract strategic acquirers. Single-location restaurants are difficult to sell at premium multiples — buyers see operator risk and real estate exposure. Established franchise systems with strong unit economics and replicable operations are the most attractive in this category.
What Moves You Within the Range
The difference between landing at 4x and 7x within the same industry comes down to a handful of factors. Every deal I’ve worked on confirms the same list:
Revenue quality. Recurring revenue, contract-based revenue, and long customer relationships all support higher multiples. Project-based, transactional, or seasonal revenue creates uncertainty that buyers price in.
Customer concentration. If one customer is more than 20% of your revenue, expect buyers to discount accordingly. Buyers are also worried about what their financing bank will say — and lenders are often more conservative than the buyers themselves.
Owner dependency. If the business needs you to run it, buyers are buying a job — not a business. Real management depth is one of the most valuable things you can build before going to market.
Growth trajectory. Buyers pay for momentum. A business growing 15% annually gets valued differently than one that’s flat, even at the same EBITDA level.
Financial clarity. Clean books, organized records, no complicated related-party transactions. Buyers pay a premium for certainty, and they discount heavily for complexity.
Process quality. The best multiple comes from a competitive process with multiple buyers at the table. A single buyer negotiating without competition will find the floor of the range. Multiple competing buyers will find the ceiling.
The Multiple Is a Starting Point, Not a Finish Line
These benchmarks are useful for calibrating expectations. But the specific multiple your business commands will depend on your individual story, who’s at the table when you sell, and how well the process is run.
I’ve seen businesses sell at the top of their industry range because the right strategic buyer was in the process and paid for synergies. I’ve seen businesses trade at the bottom because the seller went with a single unsolicited offer and had no competitive tension.
The multiple isn’t fixed. It’s influenced.
If you want to know where your business would likely trade in today’s market — and what it would take to move you toward the top of your range — that’s a conversation worth having before you’re ready to sell.
Daniel Askew is the Founder & CEO of Icon Business Advisors, a Nashville-based M&A advisory firm serving business owners with $3M–$50M in revenue. Icon specializes in sell-side M&A, capital raising, and exit planning for lower middle market operators. Schedule a confidential valuation conversation.