Step 1 · Understand the number
What is an EBITDA multiple, in plain English?
Almost every UK SME transaction is priced off adjusted EBITDA — earnings before interest, tax, depreciation and amortisation, with owner-specific costs added back (excessive director salary, personal vehicles, one-off legal fees, and so on). Buyers then apply a multiple to that number to arrive at an enterprise value.
A business generating £500,000 of adjusted EBITDA in a sector that trades at 5x is worth roughly £2.5m on an enterprise-value basis. Cash and debt then adjust that to a headline equity price. That is the entire arithmetic — everything else in this guide is about which multiple applies to you, and how to move it up.
Step 2 · Benchmark your sector
UK EBITDA multiples by sector (2026 ranges)
These are working ranges we see across live UK SME transactions between £500k and £15m enterprise value. They are indicative, not a quote — where you land inside (or outside) the range is driven by the factors in the right-hand column.
| Sector | Typical multiple | Key value drivers |
|---|---|---|
| B2B SaaS & Software | 6x – 12x EBITDA (or 3x – 8x ARR) | Net revenue retention, gross margin, ARR growth, low churn, IP defensibility. |
| Wealth Management / IFA firms | 4x – 8x EBITDA (or 3% – 5% of AUM) | Recurring advice fees, client age profile, FCA permissions, adviser retention. |
| Accountancy Practices | 0.9x – 1.3x recurring fees | Fee mix (compliance vs advisory), client concentration, cloud-native systems, staff continuity. |
| Specialist Healthcare & Dental | 6x – 10x EBITDA | CQC rating, NHS/private mix, clinician contracts, freehold vs leasehold, catchment. |
| Managed IT Services (MSP) | 5x – 9x EBITDA | MRR %, contract length, per-seat pricing, cybersecurity attach rate. |
| E-commerce & DTC brands | 3x – 6x EBITDA (or 1x – 3x revenue) | Repeat-purchase rate, brand strength, gross margin, platform diversification. |
| Professional Services (consulting, legal, marketing) | 3x – 6x EBITDA | Recurring retainers, non-owner delivery, utilisation, key-client concentration. |
| Manufacturing & Engineering | 4x – 7x EBITDA | Order book, capex intensity, unionisation, freehold, sector cyclicality. |
| Construction & Trades | 2.5x – 5x EBITDA | Framework contracts, project-mix visibility, working capital, HSE record. |
| Recruitment | 3x – 6x EBITDA | Perm vs contract split, GP per head, client concentration, niche vs generalist. |
| Hospitality & Leisure | 3x – 6x EBITDA | Freehold value, brand, seasonality, wet:dry ratio, staff cost as % revenue. |
| Logistics & Distribution | 4x – 7x EBITDA | Contract length, fleet age, fuel exposure, warehouse ownership. |
Sources: BVR / Pitchbook UK SME multiples, UK200Group and BDO PCPI benchmarks (2024–2026). These are external published sector ranges. Our own deterministic engine (v1.1.2) currently holds full coverage at micro / small / lower-mid bands across sectors; mid-market bands outside SaaS return "insufficient data" pending the v1.2.0 sector-specific review.
Step 3 · Move the multiple
What actually moves your multiple up
- Recurring revenue. Every 10% of revenue you can show as contracted or subscription typically adds 0.3x–0.7x to the multiple.
- Owner-independence. If the business runs for 30 days without you touching it, buyers pay more — often the single biggest lever.
- Customer concentration. No single client above 15% of revenue. Above 25% and buyers discount aggressively.
- Clean financials. Xero/QuickBooks, monthly management accounts, reviewed by an accountant. Poor books cost you 1x–2x on the multiple alone.
- Growth rate. A business growing 20%+ YoY trades at a materially higher multiple than a flat one, even in the same sector.
- Sector tailwind. Regulated, AI-adjacent, or consolidating sectors (IFA, MSP, dental, specialist accountancy) all attract premium buyers today.
Step 4 · Get an evidence-backed number
From a range to your number
A sector table like the one above is the starting point, not the answer. Two businesses in the same sector, with the same EBITDA, routinely sell for very different prices — the difference is almost always in the drivers above, not the sector.
Our free AI valuation tool takes about 60 seconds. It asks for the same inputs a corporate-finance adviser would ask for (sector, revenue, EBITDA, recurring %, owner hours, top-client %) and returns an evidence-backed range against live UK comparables — plus the specific things you could change to push your number higher before you go to market.
Free AI valuation — the first step of any exit
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Related
Keep going
- → Sector comparables — what businesses like yours have actually sold for.
- → Deal readiness check — score how sale-ready your business is today.
- → Transaction timeline — how long a UK SME sale actually takes.
- → Partnership route — sell a stake now, glidepath to a full exit later.