What Is My Business Worth? SDE & EBITDA Multiples by Industry (2026)

Reviewed by the Regalis Capital acquisitions team. Last updated June 2026.

Valuing a small business is not guesswork, and it is not the round number an owner has in their head. It is a math problem with two inputs: a real cash flow figure and a multiple the market is paying for businesses like yours. This guide gives you both, using closed-transaction data and per-industry multiples, then shows you the worked math so you can run your own number before you ever talk to a broker or a lender.

What Is My Business Actually Worth in 2026?

In Q1 2026, the median small business sold for $350,000 on $165,256 of median cash flow, which works out to a 2.7x cash flow multiple (BizBuySell Insight Report, Q1 2026). That is the single most useful benchmark for a sub-$1M Main Street business: take the business's real annual cash flow and multiply by a number, usually between 2 and 6, set by the industry and the quality of the earnings.

Two things move the number more than anything else. The first is which cash flow figure you use (the SDE vs EBITDA distinction below). The second is whether the earnings are clean and verifiable. A business with documented, recurring, transferable cash flow earns a higher multiple than one whose income depends on the current owner working 60-hour weeks. Use the acquisition calculator to test how different cash flow assumptions move the value.

What Is the Difference Between SDE and EBITDA, and Which Applies to Me?

The median small business sold on a cash flow figure of $165,256 in Q1 2026, and that figure is SDE, not EBITDA (BizBuySell, Q1 2026). The two are not interchangeable, and using the wrong one will overvalue or undervalue a business by a wide margin.

SDE (Seller's Discretionary Earnings) is the right metric for owner-operated businesses, typically under $1M to $2M in earnings. It starts with net profit and adds back the owner's salary, the owner's personal benefits, interest, taxes, depreciation, and one-time expenses. It answers the question: how much total financial benefit does one working owner pull from this business?

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) does not add back an owner's salary. It assumes the business pays a manager to run it. EBITDA is the right metric for larger businesses bought by private equity or strategic buyers who will install professional management.

The trap: an HVAC business might trade at roughly 2.9x SDE on Main Street, but a private equity roll-up may quote roughly 8x EBITDA for the same trade (Sundance Financial; First Page Sage, 2025). Those are not the same number measured two ways. SDE is larger than EBITDA for the same business because it includes the owner's pay, so an SDE multiple is naturally lower than an EBITDA multiple. Never compare an SDE multiple to an EBITDA multiple as if they were the same metric.

What Multiple Do Small Businesses Actually Sell For?

Across all industries, small businesses sold at an average of about 2.5x SDE in 2025, with the median Q1 2026 transaction closing at 2.7x (Sundance Financial; BizBuySell, Q1 2026). The full range runs from roughly 1.5x for low-barrier, easy-to-replicate businesses (routes, basic personal services) up to 6x and beyond for asset-heavy or recurring-revenue businesses.

Here is the closed-market picture for Q1 2026:

A multiple below the 2.5x to 2.7x average is not automatically a bad business. Routes and low-barrier service businesses trade cheap on SDE because they are easy to start from scratch and the cash flow walks out the door with the owner. A multiple well above the average usually signals real estate value, hard equipment, or recurring contracted revenue that transfers to a new owner.

What Multiple Does My Industry Trade At?

Industry is the largest single driver of the multiple. A laundromat at roughly 4.0x SDE and a hair salon at roughly 2.0x SDE can have identical cash flow and sell for double the price difference, purely because of what each category trades for. The table below pulls per-industry SDE multiples and median closed prices from Regalis Capital's analysis of business-for-sale market data, cross-checked against published benchmarks.

Per-industry multiples are SDE multiples drawn from Regalis Capital's aggregate of business-for-sale listings (as of 2026), cross-checked against Sundance Financial's published 2025 SDE benchmarks. Self-storage is shown from the Sundance benchmark because it is not in the local dataset. Treat these as starting ranges, not exact appraisals.

Notice the pattern. The high-multiple categories (car wash, self-storage, laundromat) share two traits: meaningful real estate or equipment value, and revenue that does not depend on the owner being on-site every day. The lower-multiple categories tend to be labor-driven services where the owner is the business. See the full breakdown of which categories produce the best returns in What's the Best Business to Buy?.

How Do Add-Backs Change the Number?

Add-backs are the single largest source of valuation disputes, and they routinely swing the cash flow figure by 15% to 50%. An add-back is an expense the seller removes from the books to show the business's true earning power: the owner's above-market salary, personal vehicles run through the company, a family member on payroll who does no work, one-time legal fees.

This is exactly why the cash flow figure matters more than the multiple. If a seller pads SDE by $50,000 in soft add-backs and the business trades at 3x, that padding adds $150,000 to the asking price. Every add-back has to be defensible. The add-backs glossary entry breaks down which add-backs hold up and which get stripped out in diligence.

Why Won't the SBA Lend Above the Appraisal?

If you finance the purchase with an SBA 7(a) loan, the loan proceeds are capped at an independent business valuation from a Qualified Source, and any price above that appraisal has to be financed subordinate to the SBA loan (SBA SOP 50 10 8, effective June 1, 2025). In plain terms: a lender will not hand you money to overpay.

This is a built-in valuation guardrail. A broker can list a business at any number they want, and a motivated buyer can agree to it, but the SBA lender orders its own independent appraisal. If the agreed price is $700,000 and the appraisal comes in at $600,000, the lender finances against $600,000. The $100,000 gap has to come from the seller (a price cut), the buyer (more cash), or a seller note sitting behind the SBA loan.

For a buyer, this is protection. The appraisal is a second opinion that keeps an emotional or inflated price in check. For a seller, it means the asking price needs to survive a third-party appraisal, not just find one willing buyer.

What Is the Regalis 3x to 5x EBITDA Sweet Spot?

The deals that finance cleanly and produce strong buyer returns cluster in the 3x to 5x EBITDA range. Below 3x EBITDA is generally a good deal for the buyer. Above 5x EBITDA, the deal needs additional de-risking, such as a larger seller note, an earnout, or a stronger recurring-revenue base, to justify the price.

The logic is debt service. A business bought at a low multiple throws off enough cash to comfortably cover the loan payment, leaving a cushion for a slow month or an unexpected repair. A business bought at a high multiple has a thinner cushion, so a small dip in performance can put the loan payment at risk. The multiple is not just a price tag, it is a measure of how much room for error the deal has.

Note the metric: the 3x to 5x sweet spot is stated in EBITDA, which runs lower than the SDE multiples in the table above (because EBITDA excludes owner pay). A Main Street business at 3x SDE and a larger business at 4x EBITDA can both be sensible buys; the metrics simply are not the same yardstick.

How Do I Get a Real Valuation?

The benchmarks in this guide give you a fast, defensible estimate: take the business's verified cash flow, apply the industry multiple, and sanity-check against the median data. That is enough to know whether an asking price is in the right area code before you spend time on a deal.

A real valuation goes further. It normalizes the add-backs line by line, confirms the cash flow is recurring and transferable, accounts for the real estate and equipment, and tests the number against what a lender will actually finance. Regalis Capital reviews upwards of 20,000 deals a month, so the valuation team sees what each category is genuinely trading for in real time, not what a stale industry report says. We pressure-test the cash flow, the add-backs, and the multiple, then tell you what the business is worth to finance and close, not just what it is listed at.

About the Regalis Valuation Process

When Regalis evaluates a target, every deal runs through a three-part vetting process: location, operations, and financials. The financial vetting normalizes the seller's stated earnings, strips out add-backs that do not survive scrutiny, and applies a multiple grounded in current closed-transaction data rather than the seller's expectations. That is the difference between an asking price and a valuation a lender will fund.

Frequently Asked Questions

How do I calculate what my business is worth?

Start with adjusted annual cash flow (SDE for an owner-operated business), then multiply by your industry's market multiple. The median small business sold at 2.7x SDE in Q1 2026 (BizBuySell), so a business with $200,000 of clean SDE in a category that trades at 3x is worth roughly $600,000. Verify the add-backs first, since inflated cash flow is the most common valuation error.

What is a good SDE multiple in 2026?

The all-industry average is about 2.5x to 2.7x SDE, with the median Q1 2026 sale closing at 2.7x (BizBuySell; Sundance Financial). Anything in the 2x to 4x range is typical for Main Street. Higher-multiple categories like car washes (~5.8x), laundromats (~4.0x), and self-storage (~4.6x) trade above that because of real estate and recurring revenue. A multiple is good or bad only relative to the industry and the quality of the cash flow.

Is SDE the same as EBITDA?

No. SDE adds back the owner's salary and personal benefits on top of EBITDA, so SDE is a larger number for the same business. SDE is the right metric for owner-operated businesses under roughly $2M in earnings; EBITDA is for larger, manager-run businesses. Because the figures differ, an SDE multiple (often 2x to 4x) is not comparable to an EBITDA multiple (often higher). Confirm which one a seller is quoting.

Why is my broker's valuation higher than the SBA appraisal?

A broker's valuation reflects the asking price the seller hopes to get, often built on optimistic add-backs. The SBA lender orders an independent appraisal from a Qualified Source and caps loan proceeds at that figure (SBA SOP 50 10 8, effective June 1, 2025). When the appraisal comes in below the agreed price, the gap must be covered by a price reduction, more buyer cash, or a seller note behind the SBA loan. The appraisal is the financeable number.

What multiple should I pay to buy a business?

Aim for the 3x to 5x EBITDA range, where deals finance cleanly and leave a debt-service cushion. Below 3x EBITDA is generally a good buy; above 5x needs extra de-risking like a larger seller note or an earnout. In SDE terms, most Main Street deals close between 2x and 4x. The right multiple depends on how recurring and transferable the cash flow is, not on the asking price.

How much is a business with $200,000 in SDE worth?

At the Q1 2026 median multiple of 2.7x, a business with $200,000 of verified SDE is worth about $540,000 (BizBuySell). In a higher-multiple category it is worth more: a laundromat at 4.0x would be roughly $800,000, a car wash at 5.8x roughly $1,160,000. The figure assumes the $200,000 SDE is clean and verified; padded add-backs lower the real number.

Does revenue determine what my business is worth?

No. Cash flow, not revenue, drives small business value. The median business sold in Q1 2026 had $713,404 in revenue but only $165,256 in cash flow, and the price was tied to the cash flow at a 2.7x multiple (BizBuySell). A high-revenue, low-margin business can be worth less than a smaller business with strong, clean cash flow. Always value on adjusted earnings, not the top line.

How long does it take to sell or buy a small business?

A clean small business acquisition typically closes in 60 to 90 days once a deal is under agreement, though the full process from search to close runs longer (industry aggregators; BizBuySell reported a 170-day median time-to-close for 2025). Valuation disputes, financing, and due diligence are the usual sources of delay. A well-prepared seller with clean books and a buyer with financing lined up moves fastest.

Ready to Find Out What a Business Is Really Worth?

Whether you are sizing up a target or trying to understand a seller's asking price, the number that matters is what the business is worth to finance and close, not the figure on the listing.

Regalis Capital reviews upwards of 20,000 deals a month. We source acquisition targets through BizBuySell, brokers, and off-market channels, vet and value each one against live market data, structure the financing, and run the deal to close. If you have a business in your sights, we will pressure-test the valuation with you.

Start a deal assessment with Regalis Capital to get a real read on what a business is worth and how to finance it.

About Regalis Capital

Regalis Capital is a buy-side acquisition advisory firm that helps buyers find, value, and close small business acquisitions. Its team reviews upwards of 20,000 deals a month.