Valuation Multiples by Industry: A UK Owner’s Guide

A valuation multiple expresses price relative to a financial measure such as EBITDA, revenue or seller's discretionary earnings. An industry label alone is not enough to choose one. Size, earnings quality, timing and deal structure can change the answer materially.

Start with how to value a business for the methods. This guide explains how to read a multiples table and what the Exit Mode calculator assumes. It does not present undisclosed deal prices as evidence or promise a sector sale price.

What does an EBITDA multiple mean?

Enterprise value divided by normalised EBITDA is EV/EBITDA. A £2m enterprise value and £500,000 normalised EBITDA imply 4×, provided the figures refer to the same business, scope and period. An equity purchase price divided by EBITDA is not automatically the same measure.

Revenue multiples use a different denominator. ARR, recognised annual revenue and gross recurring fees are not interchangeable. SDE generally includes an owner-compensation adjustment and needs its own comparable evidence.

Is a business worth 3 times profit?

It might be, but “profit” needs defining and 3× needs evidence. Three times net profit, EBITDA and SDE can produce very different amounts. None is a universal rule.

For example, £200,000 EBITDA × a hypothetical 3 gives £600,000 enterprise value. If £150,000 net debt is deducted and no other adjustments apply, equity value becomes £450,000 before fees and tax. A different buyer, earnings definition or payment structure changes the result.

Sector starting points used in our calculator

These are the calculator's model inputs, not current observed UK SME sale ranges. The model's calibration notes reference UK and Ireland mid-market research, with conservative sector choices and separate size adjustments. They have not been revalidated as a 2026 market survey. Do not use the table alone to price your business.

The underlying source family includes the Dealsuite M&A Monitor research. Model choices are not necessarily the same as published source medians. The table exposes assumptions so you can challenge them.

These inputs anchor a larger earnings scale than many owner-led companies. Applying them directly to a small founder-dependent business would ignore the model's separate discounts. This is why a table without its methodology can mislead.

Why business size changes the multiple

A smaller company may have fewer potential buyers, less management depth and greater concentration. A larger business can support a different funding structure and professional management cost. Size is not a guarantee of a premium, but it changes the risk and buyer universe.

In the calculator, the size adjustment is applied alongside eight other drivers. The adjustments are added together rather than compounded. The total adjustment is capped between a 70% reduction and a 45% increase relative to the starting multiple. Those are modelling boundaries, not statistical confidence limits.

Sector notes: what to check before using a multiple

Accountancy practices: distinguish gross recurring fees from total revenue and EBITDA. Client transfer, partner replacement and clawbacks matter. See the accountancy valuation guide.

Recruitment: distinguish permanent placement income from contract recruitment, and assess gross profit, contractor exposure and client concentration. A turnover comparison can be particularly misleading when pass-through payments differ.

Digital agencies and consultancies: separate retained work from one-off projects. Cost a replacement for founder-led sales and delivery. Contract length does not automatically establish renewal certainty.

MSP and IT services: examine contracted recurring revenue, gross margin, vendor dependency, churn and support liabilities. Hardware resale revenue is not equivalent to managed-service income.

Software: ARR quality, retention, growth efficiency and development costs matter. Revenue multiples used for fast-growth software cannot simply be imported into a low-growth service business with a software product.

IFA and financial services: assess recurring fee quality, client demographics, adviser retention and regulatory requirements. A fee-based reference is not automatically an enterprise-value multiple.

Dental, care, pharmacy and law: ownership rules, licences, staffing, property and contract continuity need specialist analysis. Generic professional-services inputs are not a substitute for sector evidence.

Ecommerce and construction: inventory or project working capital, customer/platform concentration and margin sustainability can dominate the headline ratio. Inspect the cash cycle as well as earnings.

What the deal archive actually supports

An archive record naming a buyer and target helps identify buyer behaviour. It supports a transaction multiple only if price basis, earnings measure and period are all disclosed and comparable. An undisclosed denominator cannot be reconstructed from an unrelated year's accounts without a clear, defensible adjustment.

For example, the Market Rocket announcement is useful route context, not a sector multiple. Our snapshot did not provide the matched price-and-earnings basis needed here. The archive is not a representative sample of private UK SME sales, so this guide does not claim archive-derived sector averages.

What pushes a multiple up or down?

Evidence-backed growth, contracted repeat revenue, management depth and defensible margins can improve the case. Customer concentration, founder dependency, deferred maintenance or unclear IP ownership can weaken it. A premium is not earned by ticking a checklist; buyers need confidence that the earnings transfer.

Use the EBITDA add-backs guide to establish the denominator and how much is my business worth? to understand the equity-value bridge. Then test a range of assumptions, not a single flattering ratio.

FAQs

What is a good EBITDA multiple?

One supported by relevant evidence for the particular business and transaction. A high number is not automatically credible, and a sector average does not establish what your company will sell for.

Can I use public-company multiples for my small business?

Only with careful comparability analysis. Listed companies often differ in scale, liquidity, reporting, growth and access to finance. Their trading ratios are not direct private-SME transaction benchmarks.

Are these multiples what UK businesses sold for this year?

No. The table shows the current calculator's starting assumptions, with its limitations made explicit. A verified current-year transaction-multiples survey would require a separate comparable dataset.