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UK SME Valuation Benchmarks by Sector in 2026
Current UK SME EBITDA multiple ranges by sector, with the specific factors that push you to the top or bottom of each band.
Sector sets the multiple band; your specific risk profile sets your position within it. This guide collects current UK SME multiple ranges by sector, drawn from completed deals in the last 24 months, with notes on what drives the variation within each band. Use it as a sanity-check before any conversation about price. UK SME 2026 sector benchmarks span 3x to 10x adjusted EBITDA: distribution and recruitment at the low end, manufacturing and B2B services in the middle, and software with recurring revenue at the upper bound.
Distribution and wholesale
Top of the band: long-standing exclusive distribution agreements, diverse customer base, strong supplier relationships, freehold premises. Bottom of the band: concentrated customer or supplier exposure, thin margins, no exclusive terms.
B2B professional services
Typical range: 4 to 7x adjusted EBITDA. Top of the band: significant recurring revenue (retainers, long contracts), diverse client base, strong second-tier management, defensible IP or methodology. Bottom of the band: project-based revenue, founder dependency, single sector exposure.
B2B software and SaaS
Typical range: 6 to 10x adjusted EBITDA for £500k+ EBITDA businesses with strong recurring revenue. Larger SaaS businesses sometimes command revenue multiples of 2 to 5x ARR independent of EBITDA. Top of the band: >85% gross retention, mid-market customer base, profitable growth above 25% per year. Bottom of the band: high churn, customer concentration, low gross margin.
Healthcare and specialist services
Typical range: 5 to 8x adjusted EBITDA. Top of the band: regulated specialism, established referral relationships, scalable operating model, qualified second-tier clinical or technical leadership. Bottom of the band: heavy regulatory exposure, owner-clinician dependency, single-location concentration.
Construction, trades, and contracting
Typical range: 3 to 5x adjusted EBITDA. Top of the band: framework agreements with public-sector or large private clients, qualified second-tier management, low working-capital intensity, strong safety and compliance record. Bottom of the band: project-by-project pipeline, working-capital pressure, single-customer concentration.
Manufacturing and engineering
Typical range: 4 to 6x adjusted EBITDA. Top of the band: own brand or technical IP, diversified customer base, modern plant with low near-term capex requirement, skilled second-tier operations team. Bottom of the band: contract manufacturing for one large customer, ageing plant, skill concentration in the founder.
Hospitality and leisure
Typical range: 3 to 5x adjusted EBITDA on stabilised performance, often blended with property value where freehold is owned. Top of the band: multi-site, recognised brand, strong management team independent of founder. Bottom of the band: single site, heavy founder presence in operations, leasehold with short tail.
Retail and e-commerce
Typical range: 3 to 6x adjusted EBITDA for stabilised businesses, with high variance for e-commerce based on growth and brand strength. Top of the band: defensible brand, strong owned customer base, healthy margins, scalable logistics. Bottom of the band: platform-dependent traffic, single-product exposure, thin margins.
Key takeaways
- Sector sets the band; qualitative factors set your position in it.
- Software and recurring-revenue businesses command the highest multiples.
- Distribution and contracting sit at the lower end on cash predictability.
- Regional differences exist but are smaller than within-band variation.
Frequently asked questions
Why are software multiples so much higher than distribution?
Recurring revenue, gross margin, and scalability. A SaaS business at 80% gross margin with 90% revenue retention has more predictable, higher-margin cash than a distribution business at 25% gross margin. Buyers pay for that predictability.
Are these multiples for trade buyers or financial buyers?
The ranges reflect typical UK SME deals across trade and PE buyers. Strategic trade premiums (10 to 30% above range) and PE platform discounts both exist on top.
My broker quoted 10x. Is that realistic?
Outside software with strong recurring revenue, 10x is unusual for UK SMEs. Quotes well above the typical band usually reflect optimistic positioning rather than likely buyer offers. Cross-check with an independent indicative range.
Does my region affect the multiple?
Modestly. London and South East often trade at small premiums for service businesses; Scotland and Northern Ireland sometimes trade at small discounts. The within-band variation from qualitative factors usually outweighs the regional difference.
How often do these ranges change?
Slowly. UK SME multiple bands move 0.5 to 1 turn over typical economic cycles. The current 2026 bands reflect firming in distribution, professional services, and software since 2024.
What multiple should I plan for in my exit?
The midpoint of your sector band, adjusted for your specific qualitative factors. Anchoring at the top of the band invites disappointment; anchoring below the midpoint leaves money on the table.
Want a real number for your business?
Free, confidential indicative valuation from the BusinessValuation.co.uk team.