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.
Businesses under roughly €1M of turnover typically sell for 2 to 3.5 times SDE — seller's discretionary earnings, which still includes the owner's compensation. Not EBITDA, and this is where most of the confusion in small business valuation lives.
Why the SDE multiple looks low
Because SDE is a bigger number. It contains a salary that EBITDA removes.
- SDE
- €268,000
- includes owner compensation
- At 2.75× SDE
- €737,000
- enterprise value
- Same business on EBITDA
- €203,000 × 4×
- €812,000 — similar answer
The two routes converge, which is the point. What does not converge is applying an EBITDA multiple to an SDE figure — that produces €1.34M for a business that transacts near €750,000.
What sits at the top of the range
- The owner is genuinely replaceable within three months
- No customer above 15% of revenue
- Revenue is contracted or genuinely recurring
- Three years of consistent, reconciled accounts
- Premises and equipment that transfer without renegotiation
Businesses with all five sit at 3.5× or occasionally above. Businesses with none sit at 1.5× and struggle to find a buyer at all.
SDE vs EBITDA covers which figure applies to you; EBITDA multiple explained covers the drivers once you cross into EBITDA territory.