Sector Valuation Multiples 2026: Benchmarks to Estimate Your Business

Quick answer. Valuation multiples relate a company's price to a financial aggregate, most often EBITDA or revenue. They give an order of magnitude, varying by sector, size and company quality. These benchmarks are only a starting point: real value depends on revenue recurrence, margins, owner dependence and growth. A multiple is never a guaranteed price.

The multiples method applies a coefficient to a company's financial aggregate to estimate its value. The most used for SMEs are the EBITDA multiple (enterprise value equals "x times EBITDA") and, for some activities, the revenue multiple. This approach complements other valuation methods, such as discounted cash flow or the asset-based approach.

Its appeal is its simplicity and its anchoring in observed transactions: a multiple reflects what buyers actually paid for comparable companies. Its limit is the same: a "market" multiple hides wide dispersion, and applying it mechanically leads to errors. It gives the starting point of a negotiation, not its end point.

The ranges below are indicative orders of magnitude for SMEs, drawn from transaction practice; they vary greatly from one deal to another and must be handled with caution. They are in no way a price guarantee.

These ranges do not replace a valuation. Two companies in the same sector can be valued at double the difference depending on the quality of their revenue and organisation. This is why we always start from the sector multiple, then adjust it company by company.

The multiple used for a given company departs from the sector benchmark according to objective criteria. A premium is justified by recurring, contracted revenue, above-average margins, sustained and proven growth, low owner dependence and a diversified customer base. Conversely, a discount sanctions heavy owner dependence, excessive customer concentration, fragile margins, a cyclical activity or unreliable accounts.

1. Revenue recurrence: the more revenue is contracted, the higher the multiple.
2. Level and stability of margins: a margin above the sector average pulls the multiple up.
3. Owner dependence: heavy dependence brings a discount, as we detail elsewhere.
4. Growth: a proven growth trajectory justifies a premium.
5. Quality of accounts: reliable, audited accounts reduce perceived risk, hence the discount.

It is precisely to act on these levers that the sale should be prepared several years ahead.

A multiple applies to an aggregate to give an enterprise value, not a share price. Between the two, net debt must be deducted and working capital adjusted, as we explain in our article on price adjustment. An owner who announces "my company is worth five times EBITDA" is reasoning on enterprise value; what they receive will depend on debt and the operating cycle at the date of sale.

A multiple only makes sense applied to a reliable, normalised aggregate. The first mistake is to multiply it by an unrestated EBITDA, inflated by exceptional income or understated by owner pay above the market. Before any calculation, the aggregate must therefore be normalised: neutralising non-recurring items, aligning owner pay with the cost of a salaried manager, restating personal expenses. Without this work, the multiple applies to a distorted base and the result has no value.

The second precaution is to cross-check approaches. The multiple is not enough on its own: it is set against a discounted cash flow approach and, where relevant, an asset-based approach. When these methods converge, the value range is credible; when they diverge sharply, it signals that a parameter deserves closer scrutiny.

1. Normalise the aggregate before applying the multiple.
2. Choose a multiple consistent with the company's size and profile, not a market average read online.
3. Cross-check with at least one other valuation method.
4. Translate the enterprise value into a share price.

A final word on the multiples circulating online or in the financial press. They aggregate very diverse transactions, of incomparable sizes and qualities, and smooth an extremely dispersed reality. Taking them at face value leads sellers to unrealistic expectations and buyers to disconnected offers. A relevant multiple is always contextualised: it comes from genuinely comparable transactions, on companies of similar size and sector, and is corrected for the specifics of the company being valued. It is this move from the general benchmark to the particular case that gives a professional valuation its worth, and that stops the negotiation bogging down in a clash of opinions.

Very small business. Below a certain size, observed multiples are lower: dependence risk and the difficulty of buyer financing weigh on valuation.

Hyper-growth business. EBITDA multiples lose relevance; the valuation rests more on prospects and discounted future flows.

Regulated activity. Value may be framed by profession-specific rules or by the value of a client base, which changes the logic of multiples.

• Do not confuse benchmark and price. A sector multiple situates, it does not fix. Value is built company by company.
• Beware of overly precise figures. The multiples circulating online are averages: real dispersion is wide.
• Reason in enterprise value, then share price. The gap, tied to net debt and working capital, can be considerable.
• Document the valuation. In a transfer, the authorities assess market value: a substantiated valuation secures the deal.

Recently, an owner presented us with an offer based on "the sector multiple", well below the value we had documented. By detailing the recurrence of their revenue, the quality of their margins and the low dependence on their person, we justified a premium over the sector benchmark, and the price gap was largely closed. Conversely, we also tempered unrealistic expectations based on multiples read online, unrelated to the reality of a micro-business.

The multiple is a useful starting point, never a truth. Our role as chartered accountant is to start from the sector benchmark, then adjust it methodically to the company's real characteristics, and to translate enterprise value into the price actually received. It is this rigour that turns a clash of opinions into a reasoned negotiation.

We always end with the same warning to owners: a multiple is not a promise. Two companies showing the same surplus can sell at very different prices, because one has secured its revenue and organisation while the other still depends on its founder. It is precisely these factors the owner can act on, by preparing the sale several years ahead. The sector multiple gives the starting point; the preparation work determines where you sit in the range, and that is where most of the value is decided. A wise owner remembers it: a company's value is prepared long before it is negotiated, and no multiple will ever replace that groundwork.

Hayot Expertise advice. Use sector multiples to situate yourself, never to conclude. Have a valuation documented for your own company, identifying premium and discount factors, then reason in share price. We build this valuation and defend it before the buyer.