15 Business Valuation Statistics

Historically, Main Street business valuations cluster in a range of about 2.0 to 2.8 times seller's discretionary earnings, according to IBBA Market Pulse data.

Multiples for the smallest businesses are narrower than owners often expect. A claimed multiple far outside this band needs strong justification.

Businesses valued under $2 million are typically priced as a multiple of SDE, while those from $2 million to $50 million are priced on EBITDA.

The earnings base shifts with deal size. Comparing an SDE multiple to an EBITDA multiple across that line produces misleading conclusions.

In the second quarter of 2025, the sub-$500K segment edged up to 2.3 times SDE, a rare reading above the 2.0 mark.

Even the smallest deals briefly priced above 2.0 times SDE. The fact that this is described as rare shows how stable the low end usually is.

In the second quarter of 2025, the $5 million to $50 million segment was around 5.5 times EBITDA.

Larger, more durable businesses command higher multiples. Size, earnings quality, and buyer type explain most of the gap from Main Street levels.

In the second quarter of 2025, sellers averaged between 78 and 92 percent of the sale price as cash at close.

The headline price is not all cash on closing day. Deal structure, including seller financing and earnouts, moves real proceeds well below the sticker.

The IBBA Market Pulse survey covers Main Street businesses valued up to $2 million and the lower middle market from $2 million to $50 million.

This is the deal-size window the multiples describe. Valuation rules for venture-scale or public companies do not carry over to this range.

Individual buyers accounted for 91 percent of purchases of the smallest Main Street businesses valued at $500,000 or less.

At the low end, the buyer is almost always a person, not a company. Their financing limits, not strategic fit, set what they can pay.

About 78.7 percent of new private-sector establishments survive their first full year.

Survival risk is a discount factor in any valuation. A young business carries a real chance of not reaching a sale at all.

Only 34.7 percent of U.S. private-sector establishments born in March 2013 were still operating in March 2023.

About one-third of businesses reach a decade. A buyer paying a multiple of current earnings is betting against that long-run attrition.

Ten-year survival rates range from 50.5 percent in agriculture, forestry, fishing, and hunting down to 24.5 percent in mining, quarrying, and oil and gas extraction.

Durability varies sharply by sector, and durability supports the multiple. The same earnings are worth more in a sector with higher survival odds.

The United States had 36.2 million small businesses in 2026, which is 99.9 percent of all U.S. firms.

Nearly every business that changes hands is small. The Main Street multiple ranges, not public-market comparables, apply to the vast majority of sales.

Small businesses generate 43.5 percent of U.S. GDP.

Small-firm earnings are a large slice of total output. The aggregate value being transacted in small-business sales is substantial, not marginal.

In 2022, professional, scientific, and technical services held the most nonemployer establishments of any sector, at 4,013,209, with $229.4 billion in receipts.

Service businesses dominate the count of solo firms. Many will never sell because their value is tied to one owner rather than transferable assets.

The real estate, rental, and leasing sector brought in 20.0 percent of total nonemployer receipts, $344.7 billion, on just 10.6 percent of establishments.

Receipts per firm vary widely by sector. Higher revenue per operator generally supports a higher multiple at sale.

U.S. retail sales reached $7,041.0 billion in 2022, up 8.0 percent from $6,519.8 billion in 2021.

Sector revenue trends shape valuations directly. Buyers pay more when the underlying market is growing rather than shrinking.