Below are commonly observed seller's-discretionary-earnings (SDE) multiple ranges for main-street and lower-middle-market businesses, by industry — followed by the four factors that decide where inside (or outside) the range a specific business actually lands. If the SDE concept is new, start with how business value is actually calculated.
| Industry | Common range | What moves it |
|---|---|---|
| Restaurants & food service | 1.5× – 2.5× SDE | Lease terms and kitchen condition move the range; franchises with transferable agreements price at the top of it. |
| HVAC, plumbing & electrical | 2.0× – 3.5× SDE | Service-agreement revenue and a technician team that stays push toward the top; owner-as-lead-tech pulls toward the bottom. |
| Dental & medical practices | 1.5× – 3.0× SDE | Often quoted as a percentage of annual collections as well; payor mix, hygiene recall, and provider transition terms dominate. |
| Landscaping & lawn care | 2.0× – 3.0× SDE | Commercial maintenance contracts price like recurring revenue; route density matters more than raw revenue. |
| Auto repair & service | 2.0× – 3.0× SDE | Equipment condition and bay capacity set the floor; a manager-run shop with fleet accounts beats a one-mechanic shop at the same earnings. |
| E-commerce & online retail | 2.5× – 4.0× SDE | Channel concentration (one marketplace account) discounts hard; owned audience and repeat-purchase rate earn the premium. |
| Software / SaaS | 3.0× – 5.0×+ SDE | Recurring contracted revenue changes the lens entirely; larger SaaS prices on revenue multiples rather than SDE. |
| Manufacturing & fabrication | 3.0× – 5.0× SDE | Backlog, niche tooling, and customer diversification carry the multiple; surplus equipment can be priced separately. |
| Trucking & logistics | 2.0× – 3.5× SDE | Fleet age and driver retention are the diligence battleground; dedicated-lane contracts price like recurring revenue. |
| Professional services & agencies | 2.0× – 3.0× SDE | Client contracts and a delivery team that isn't the founder are everything; personal-brand practices discount steeply. |
| Retail (brick & mortar) | 1.5× – 2.5× SDE | Inventory usually priced separately at cost; lease assignability is a gating diligence item. |
| Construction & contracting | 2.0× – 3.5× SDE | License transferability and bonding capacity shape the buyer pool; work-in-progress accounting gets verified line by line. |
Sellers fixate on the industry column; buyers fixate on these. Two businesses in the same row of that table can sell a full turn of SDE apart because of them.
The more the business depends on you personally — your license, your relationships, your hands on the work — the more the buyer is purchasing earnings that may leave with you. Buyers price that risk directly: heavy owner dependence routinely costs half a turn to a full turn of SDE, or shows up as an earnout that shifts the risk back onto you. The fix is boring and slow: delegate, document, and make yourself progressively unnecessary in the 12–24 months before a sale.
Unreported cash, personal expenses in the P&L, and statements that don't tie to tax returns hurt twice: they shrink the provable earnings number, and they make the buyer (and the buyer's lender) discount whatever number remains. Because price is a multiple of provable earnings, every dollar a buyer can't verify costs several dollars of price. Clean, consistent, accountant-prepared financials for the two to three years before a sale are the single highest-ROI preparation step that exists.
Registered trademarks, proprietary products and recipes, exclusive distribution territories, and a brand that generates inbound business are transferable assets a buyer will pay a premium for — when they're documented, owned by the entity being sold, and genuinely transferable. The caveat: goodwill that's really your personal reputation behaves like owner dependence and discounts rather than helps. The test is simple — does the asset keep producing when you're not the one answering the phone?
Owned real estate is valued separately from the operating business: sell it alongside the company, or keep it and become the buyer's landlord. Either way the business is then valued with a market-rate rent in its expense base, which changes the SDE the multiple applies to. Equipment, vehicles, and inventory are typically included in a going-concern price up to normal operating levels — surplus assets can be carved out and priced separately, and a business whose value is mostly tangible assets may price closer to asset value than to an earnings multiple.
Start a confidential inquiry — two sentences about the business and we'll tell you which lens and which comparables actually apply before you share a single document. Or get an instant heuristic from the free SDE calculator. Or read about the confidential sale process and how broker fees work.
The ranges and statements on this page describe commonly observed market patterns. They are not an appraisal, a broker price opinion, or an opinion of value for any specific business, and they are not a representation that any business will sell at any particular price or multiple. Individual results vary widely with size, geography, deal structure, and market conditions. Nothing on this page is legal, tax, or financial advice; consult your own advisors.
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