What is my company worth based on revenue?
Revenue multiples run from 0.3× to 8× depending on business model — but any revenue multiple is an earnings multiple in disguise, and dividing by your margin reveals which.
Between 0.3× and 8× annual revenue, depending almost entirely on business model. Distribution sits near the bottom, low-churn software near the top. But before using any of those figures, do one calculation.
Divide the revenue multiple by your margin
Every revenue multiple is an earnings multiple wearing a disguise.
- 1× revenue at 25% margin
- 4× EBITDA
- sensible
- 1× revenue at 12% margin
- 8.3× EBITDA
- rich for an SME
- 1× revenue at 6% margin
- 16.7× EBITDA
- not a real price
If the implied earnings multiple falls outside the normal two-to-six band, the revenue multiple is wrong for your business.
Typical ranges by model
| Model | Revenue multiple |
|---|---|
| SaaS, low churn | 3–8× ARR |
| Subscription, physical product | 1–2.5× |
| Retainer-based services | 0.8–1.5× |
| Project-based services | 0.4–0.8× |
| E-commerce | 0.5–1.5× |
| Wholesale and distribution | 0.3–0.8× |
When revenue is the right basis
When earnings are suppressed by deliberate reinvestment, when revenue is contractual enough to behave like an annuity, or when margins swing too violently for any single year to mean anything. Outside those three cases, a buyer will value your business on earnings whatever you present.
Revenue multiple explained covers the mechanics; revenue multiple or EBITDA multiple covers choosing between them.