FAQ
Multiples
8 published.
·2 min
Does company size affect the multiple?
More than any other single factor, and it is the one claim in this field that replicates across four independent datasets on three continents. The reason is the buyer pool.
·1 min
What is an ARR multiple?
Annual recurring revenue times a figure between 3 and 8, used for subscription software. Churn and net revenue retention decide where inside that range you land.
·1 min
How do I find the multiple for my industry?
Published sector averages are drawn from transactions far larger than most SMEs. Confirm the size band before using any comparable — and if you cannot find it, do not use the figure.
·1 min
Is a 3x multiple good?
It depends on what it is three times. Three times EBITDA is low for most businesses above €500k of earnings; three times SDE is at the top of the range for a small one.
·1 min
What is a revenue multiple?
A shortcut that prices a business at a number of times turnover, assuming margin is predictable within a business model. Divide it by your margin to see what it really implies.
·1 min
What is a good EBITDA multiple?
Four to six times for an SME under €2M of EBITDA, two to four below €500k. Where you sit inside the band matters more than the band itself.
·1 min
What multiple do small businesses sell for?
Most businesses under €1M of turnover sell for 2 to 3.5 times SDE. The figure that trips owners up is which earnings number that multiple applies to.
·1 min
Why do some companies sell for higher multiples?
Four reasons account for nearly all of it: size, growth, revenue quality and independence from the owner. Only the first has published numbers behind it.