What Is My Business Worth? 2026 SDE Multiples by Industry
Most Main Street businesses sell for 2–4x SDE; the Q2 2026 median was 2.7x and $349,250. See 21 industry multiples, how SDE works, and what moves your price.
By Tim · Oct 2, 2026 · 5 min read
From the BizAIConsultant blog — plain-English deal guidance for Main Street owners and buyers.
The short answer
Most Main Street businesses sell for about 2 to 4 times seller's discretionary earnings (SDE). The median deal in Q2 2026 closed at 2.7x SDE and $349,250, on median cash flow of $155,921, per the BizBuySell Insight Report.
Where you land in that range depends on three things: your industry, how much of your SDE a buyer believes, and how much the business needs you. The last one matters more than most owners expect. This post shows how SDE is calculated, the 2026 multiples by industry, and a worked example.
How SDE works
SDE is the total cash benefit one full-time owner-operator takes out of the business in a year. Start with pre-tax net profit, then add back what a new owner would not have to pay.
- Owner's salary and payroll taxes — the new owner replaces you, so your pay is part of the earnings.
- Owner perks run through the business — health insurance, a personal vehicle, a family phone plan.
- Interest, depreciation and amortization — financing and accounting choices, not operating cash.
- True one-time costs — a lawsuit settlement, a one-off rebrand, a flood repair.
- Non-working family on payroll — only if they truly do no work.
SDE is the right yardstick for owner-run businesses earning under roughly $2M. Above that, buyers switch to EBITDA, which also subtracts a market-rate manager's salary. That is why EBITDA multiples look higher: they are applied to a smaller number.
The catch: add-backs are where deals fight. Regalis Capital notes add-backs routinely swing stated cash flow by 15% to 50%, and careful buyers discount SDE until each one is documented. Every add-back you can't prove with a receipt or statement is value you lose at the table.
2026 SDE multiples by industry
The spread is wide: a car wash sells for more than twice the SDE multiple of a restaurant. These are median multiples from businesses sold Q3 2021 through Q2 2026, per BizBuySell's industry valuation data.
| Industry | SDE multiple | Revenue multiple | Value at $200K SDE |
|---|---|---|---|
| Car washes | 4.87x | 1.96x | $974K |
| Funeral homes | 4.28x | 1.67x | $856K |
| Laundromats | 3.70x | 1.33x | $740K |
| Storage facilities | 3.41x | 0.99x | $682K |
| Liquor stores | 3.39x | 0.50x | $678K |
| Day care and child care | 3.28x | 0.88x | $656K |
| IT and software services | 3.22x | 1.08x | $644K |
| Home health care | 3.00x | 0.63x | $600K |
| Insurance agencies | 2.87x | 1.52x | $574K |
| Auto repair | 2.85x | 0.65x | $570K |
| HVAC | 2.83x | 0.60x | $566K |
| Dental practices | 2.75x | 0.76x | $550K |
| Plumbing | 2.61x | 0.69x | $522K |
| Gyms and fitness centers | 2.54x | 0.70x | $508K |
| Landscaping | 2.49x | 0.72x | $498K |
| Coffee shops and cafés | 2.27x | 0.47x | $454K |
| Cleaning businesses | 2.25x | 0.72x | $450K |
| Restaurants | 2.18x | 0.39x | $436K |
| Hair salons and barbers | 2.10x | 0.52x | $420K |
| Delivery and route businesses | 1.75x | 0.63x | $350K |
| Nail salons | 1.74x | 0.41x | $348K |
Two cautions. First, these are medians; half the deals in each row sold for less. Second, revenue multiples are a sanity check, not a pricing method — a liquor store and a laundromat can have similar SDE multiples but very different revenue multiples because their margins differ.
The market overall is steady but slower. Q2 2026 closed deals fell 10% year over year to 2,117, while the median multiple rose 2%. Restaurant sale prices fell 12% to a $205,000 median, and retail multiples rose 6% (BizBuySell).
What moves your multiple
Your industry sets the starting point. These factors decide whether you land at the top or bottom of it.
- Size. Bigger earnings buy a bigger multiple. IBBA Market Pulse data cited by East Coast Advisory Team puts medians at 2.0x SDE for businesses under $500K, 2.5x for $500K–$1M and 3.0x for $1M–$2M.
- Owner dependence. This is the big one. Owner-reliant businesses plateau around 1.5x–2.0x SDE regardless of industry, per the same analysis. If customers call your cell and only you can quote jobs, the industry premium mostly disappears.
- Recurring revenue. Maintenance agreements, memberships and contracts sell at the high end of an industry's range (Sundance Financial).
- Customer concentration. Buyers start discounting when one customer tops roughly 15–20% of revenue, and discount hard above 40%.
- Trend. Three years of steady growth earns a premium; flat or falling revenue pushes you down.
- Clean books. Tax returns that match your P&L, and add-backs with receipts, keep SDE from being haircut.
- Financeability. Most buyers use SBA or bank debt. If the price leaves too little cash to cover loan payments, lenders cap it no matter what the multiple table says.
Worked example: one HVAC business, four prices
The same company can be worth $460K or $759K depending on what a buyer believes and how much it runs without the owner. Illustrative numbers only.
Step 1 — the owner's SDE. Net profit $110K + owner salary and payroll taxes $95K + owner health insurance $14K + personal truck $9K + depreciation $11K + "one-time" website rebuild $11K = $250K claimed SDE.
Step 2 — the buyer's SDE. The buyer rejects the truck (no mileage log) and the website (it gets rebuilt every few years, so it's a real cost). Verified SDE: $230K.
| Scenario | SDE used | Multiple | Price |
|---|---|---|---|
| Owner's math, industry median | $250K | 2.83x | $708K |
| Verified SDE, industry median | $230K | 2.83x | $651K |
| Verified SDE, owner runs every job | $230K | 2.0x | $460K |
| Verified SDE, 40% of revenue on maintenance agreements, lead tech runs the field | $230K | 3.3x | $759K |
The $20K of weak add-backs cost $57K of price. Owner dependence cost another $191K. Neither is fixed at the closing table — both are fixed in the 12–24 months before you list.
Valuation-readiness checklist
- ☐ Pull three years of tax returns and P&Ls and confirm they match
- ☐ List every add-back with a receipt, statement or payroll record behind it
- ☐ Drop add-backs you can't document — a buyer will anyway
- ☐ Find your industry's median SDE multiple and your size tier
- ☐ Check customer concentration: no one customer above 15–20% of revenue
- ☐ Move repeat work onto contracts, memberships or maintenance plans
- ☐ Write down the jobs only you do, and train someone to do each one
- ☐ Test financeability: can the price be paid from cash flow with an SBA loan?
- ☐ Get a broker opinion of value or a certified appraisal before you set an asking price
Want to know what your business is worth — or find one to buy? List it or browse opportunities on BizAIConsultant.com. BizAIConsultant uses AI to match sellers with qualified buyers, keeps financials behind an NDA, and connects you with legal and deal-structuring help when you need it.
This article is general information, not legal, tax or financial advice. Multiples change quarterly; get a professional valuation before you price or buy a business.
Sources
- BizBuySell — Insight Report (Q2 2026)
- BizBuySell — Business Valuation Multiples by Industry
- Sundance Financial — BizBuySell Q2 2026 Insight Report: Three Takeaways
- Sundance Financial — SDE Multiples by Industry (2026)
- Sundance Financial — How Much Is My Business Worth? (2026)
- Regalis Capital — What Is My Business Worth? SDE & EBITDA Multiples (2026)
- East Coast Advisory Team — Business Valuation Multiples by Industry: A 2026 Reality Check
Tim
Founder & Lead Consultant, Biz AI Consultant
Tim built Biz AI Consultant to make buying and selling Main Street businesses more transparent. (Bio placeholder — edit in the admin.)
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