Cornerstone reference
The UK SME Valuation Multiples Guide
Indicative EBITDA multiple ranges for UK owner-managed businesses. Edition: H2 2026.
Written by Tony Vaughan, Founder, BusinessValuation.co.uk. Last reviewed July 2026.
Bottom line up front
Most UK SMEs transact between 3x and 8x adjusted EBITDA. The sector sets the band and the specific risk profile of the business sets where it lands within it. These ranges are guidance, not a valuation.
| Sector | Under £1m adjusted EBITDA | £1m+ adjusted EBITDA |
|---|---|---|
| Engineering & Precision Manufacturing | 3.5x–5.5x | 4.5x–6.5x |
| Distribution & Wholesale | 3.0x–5.0x | 4.0x–6.0x |
| Transport & Haulage | 2.5x–4.5x | 3.5x–5.5x |
| Construction & Trades | 2.5x–4.5x | 3.5x–5.5x |
| Facilities Management & Cleaning | 3.0x–5.0x | 4.0x–6.0x |
| IT Services & MSPs | 4.0x–6.5x | 5.0x–8.0x |
| Software & SaaS | 5.0x–8.0x | 6.0x–10.0x |
| Recruitment & Staffing | 3.0x–5.0x | 4.0x–6.0x |
| Care & Healthcare Services | 4.0x–6.0x | 5.0x–8.0x |
| Professional Services | 3.5x–5.5x | 4.5x–7.0x |
| E-commerce & Consumer | 3.0x–5.0x | 4.0x–6.0x |
| Food & Beverage Manufacturing | 3.5x–5.5x | 4.5x–6.5x |
- (a) Multiples applied to adjusted (normalised) EBITDA. For the smallest owner-operated businesses, Seller's Discretionary Earnings (SDE) pricing often applies and typically produces lower effective EBITDA multiples.
- (b) Contracted recurring revenue, low customer concentration and genuine management depth push a business toward or above the top of its band. Owner dependency and concentration push it below the bottom.
- (c) High-growth SaaS businesses are frequently priced on revenue rather than EBITDA multiples.
How to use these ranges
Read the table in two steps. First, find your sector row and note the band for the size of business you are. That is the range the market is currently paying for reasonable examples in your category. Second, ask honestly where your business sits inside that band. The sector sets the range; your business sets the position inside it.
The position inside the band is decided by the eight value drivers we cover in full in our article on the eight factors that affect business value: earnings quality, growth trajectory, customer concentration, recurring revenue share, gross margin and margin stability, sector tailwind, absolute scale of EBITDA, and owner reliance. A £1m EBITDA IT services business with 60% recurring revenue, top-customer share below 20% and a credible deputy MD sits at or above the top of the IT Services band. The same headline profit with 5% recurring, one customer at 40% and the founder writing every proposal sits at or below the bottom.
Two further points before you translate a range into a plan. The multiple is applied to adjusted EBITDA, not the number in your management pack. Our companion article, adjusted EBITDA explained in plain English, walks through the calculation step by step and shows the add-backs UK SMEs typically make. The headline enterprise value from a multiple is then not the cash that arrives in your account on completion day. Debt, debt-like items, working-capital true-up, deferred consideration and tax all sit between the multiple and the net cash proceeds. We cover that gap in why EBITDA alone is not enough. And a multiple range is not a valuation. The number that survives buyer diligence and lands in cash is built on normalised earnings, evidenced comparables and a worked equity bridge, not a table cell.
Methodology and honesty note
These ranges reflect the professional judgement of Tony Vaughan, drawing on 2,500+ UK SME business value appraisals and publicly available UK transaction data. They are indicative guidance for owner-managed businesses with adjusted EBITDA broadly between £100k and £5m. They are not a valuation of any specific business. Every business is unique: two companies in the same sector with identical profits routinely justify materially different multiples. This guide is updated twice a year.
Interactive tool
Where do I sit inside my sector's band?
Score your business against the eight value drivers. The tool plots your position inside the H2 2026 range for your sector. Guidance only, not a valuation.
Your indicative position
0 of 8 drivers scored
Engineering & Precision Manufacturing • Under £1m adjusted EBITDA • published range 3.5x–5.5x
Answer all eight drivers to see your position inside the 3.5x–5.5x band.
Guidance only. This tool positions your business inside the published sector band; it does not widen the band or produce a valuation. A valuation requires normalised earnings, evidenced comparables and a worked equity bridge.
Sector comparison
Compare two adjacent sectors, driver by driver
Pick a sector on the left and one of its adjacent sectors on the right. The eight value drivers map to each sector's H2 2026 EBITDA multiple band so you can see which drivers matter most in each buyer pool.
Why adjacent: downstream buyer set; comparable working-capital profile and equity-bridge scrutiny.
Engineering & Precision Manufacturing
H2 2026 guidance band
Under £1m EBITDA
3.5x–5.5x
£1m+ EBITDA
4.5x–6.5x
Typical buyer pool: Trade acquirers consolidating capacity, private equity buy-and-build platforms, and international strategics buying UK manufacturing capability.
Distribution & Wholesale
H2 2026 guidance band
Under £1m EBITDA
3.0x–5.0x
£1m+ EBITDA
4.0x–6.0x
Typical buyer pool: Trade consolidators, private equity platforms rolling up regional distributors, and manufacturers integrating downstream.
Earnings quality
Clean, evidenced adjusted EBITDA survives diligence and defends the top of the band. Rough add-backs get discounted.
MaterialMaterial input but rarely the swing factor on its own.
High impactMoves the multiple by a meaningful fraction of the sector band.
Growth trajectory
Three-year revenue and EBITDA trend. Growth pulls the multiple toward the top of the band; decline pulls it to the bottom.
MaterialMaterial input but rarely the swing factor on its own.
MaterialMaterial input but rarely the swing factor on its own.
Customer concentration
Top-customer share of revenue. Buyers discount hard for concentration risk, particularly without long contracts.
High impactMoves the multiple by a meaningful fraction of the sector band.
High impactMoves the multiple by a meaningful fraction of the sector band.
Recurring / contracted revenue
Share of revenue under multi-year contract or genuine repeat pattern. Recurring revenue re-rates the multiple upward.
MaterialMaterial input but rarely the swing factor on its own.
Low impactRarely the deciding factor in this sector's buyer pool.
Gross margin & stability
Level and consistency of gross margin. Above-benchmark, stable margin signals pricing power and lifts the multiple.
High impactMoves the multiple by a meaningful fraction of the sector band.
MaterialMaterial input but rarely the swing factor on its own.
Sector tailwind
Whether the sub-sector is attracting active buyer competition right now. Hot sub-sectors clear at the top of the band.
MaterialMaterial input but rarely the swing factor on its own.
MaterialMaterial input but rarely the swing factor on its own.
Absolute scale of EBITDA
The buyer pool widens as adjusted EBITDA crosses £1m and again at £3m, typically re-rating the band by half a turn upward.
MaterialMaterial input but rarely the swing factor on its own.
High impactMoves the multiple by a meaningful fraction of the sector band.
Owner reliance
A business that runs without the owner sells for more. Second-line management is credited; owner-run books are discounted.
High impactMoves the multiple by a meaningful fraction of the sector band.
High impactMoves the multiple by a meaningful fraction of the sector band.
Guidance only. Emphasis reflects how much each driver typically moves the multiple within the published sector band; it does not widen the band or produce a formal valuation.
UK SME valuation multiples FAQ
The questions owners ask most often when reading a sector multiple table.
What is a typical EBITDA multiple for a UK SME?
Most UK owner-managed businesses transact between 3x and 8x adjusted EBITDA. The sector sets the band and the business's specific risk profile, recurring revenue share, customer concentration, management depth and margin quality, sets where inside the band it lands. Very small owner-operated businesses are often priced on Seller's Discretionary Earnings (SDE) instead, which typically produces lower effective EBITDA multiples.
Why do smaller businesses sell for lower multiples?
Smaller UK SMEs almost always trade at lower multiples than their larger sector peers because buyers price in higher owner dependency, thinner management, less contracted revenue and a smaller pool of willing acquirers. As adjusted EBITDA moves through the £1m mark the buyer pool widens to include institutional and private equity capital, and the same sector band typically re-rates upward by half a turn to a full turn.
What is adjusted EBITDA?
Adjusted EBITDA is reported EBITDA restated to reflect what a new owner would actually inherit: above-market owner remuneration is normalised, personal costs running through the company are stripped out, one-off legal, restructuring or dispute costs are removed, and any related-party items are unwound. It is the earnings figure the multiple is applied to. A clean, evidenced adjusted EBITDA schedule typically protects five to fifteen percent of headline value during buyer diligence.
Why is my sector's range so wide?
The bands are wide because two businesses with the same profit in the same sector routinely justify materially different multiples. Recurring revenue, customer concentration, contract length, management depth and margin stability, the eight value drivers set out in our article on what affects business value, move a business from the bottom of the band to the top. A wide band is honest information, not vagueness; the work to move up inside it is usually worth more than negotiating harder on the multiple at completion.
Is this a valuation of my business?
No. These ranges are indicative sector guidance for UK owner-managed businesses with adjusted EBITDA broadly between £100k and £5m. They are not a valuation of any specific company. A valuation requires the earnings to be normalised, the multiple to be evidenced against comparable recent UK transactions, and the equity bridge to be worked. That is the free indicative valuation, which is delivered in two to three weeks with no obligation.
Get a free, confidential indicative valuation
A written range built on your actual numbers, direct with Tony Vaughan. Two to three week turnaround. No obligation.