How Much Can I Sell My Business For?

This is the question I hear more than any other. And the honest answer is almost always uncomfortable: less than you think.

After advising on hundreds of transactions, I can tell you that the gap between what an owner believes their business is worth and what a buyer will actually pay is the single most painful moment in the entire sale process. Most owners overvalue their business by 30-50%. Not because they're delusional — because they're emotionally invested in something they built, and they conflate personal value with market value.

Let me help you close that gap before it costs you a deal.

The Three Things That Determine Your Sale Price

Every business sale boils down to three variables: your earnings, the multiple applied to those earnings, and adjustments. That's it. Revenue alone does not determine your price. I've seen $5M revenue businesses sell for less than $2M revenue businesses because earnings and margins tell the real story.

Earnings. For businesses under $5M in value, buyers look at Seller's Discretionary Earnings (SDE) — the total cash flow available to an owner-operator. For larger businesses, they use EBITDA. Your earnings number is the foundation of everything. If your books are messy, your earnings are unclear, and your price will suffer.

The multiple. This is the factor applied to your earnings to arrive at a value. A plumbing company with $300K SDE might sell at 2.5x ($750K). A SaaS company with $300K SDE might sell at 5x ($1.5M). Same earnings, double the price — because the SaaS business has recurring revenue, lower risk, and higher growth potential. Multiples vary enormously by industry, size, and growth profile.

Adjustments.The multiple gives you a starting point. Then reality sets in. Customer concentration, owner dependency, the condition of your equipment, the terms of your lease, pending litigation, key employee risk — these all push the number up or down. I've seen adjustments swing a deal by 30% in either direction.

Realistic Sale Price Ranges by Business Type

Here's what I actually see businesses sell for in the current market. These are median ranges — your specific situation could be higher or lower.

Service businesses (HVAC, plumbing, landscaping, cleaning): 2.0-4.0x SDE for businesses under $1M SDE. Trades with recurring service contracts and trained crews command the top of this range. One-truck operators with the owner doing all the work are at the bottom.

Professional practices (dental, medical, accounting, law): 1.5-3.5x SDE, with enormous variation based on how transferable the client relationships are. A dental practice with strong hygiene production sells for more than a solo attorney whose clients will walk when they leave.

Restaurants and food service: 1.5-2.5x SDE. This is one of the lowest-multiple categories because margins are thin, labor is volatile, and location risk is high. Franchise restaurants with strong unit economics can beat this range.

Manufacturing: 3.0-5.0x EBITDA for small manufacturers. Higher for companies with proprietary products, long-term contracts, or specialized capabilities that create barriers to entry.

Technology and SaaS: 3.0-8.0x revenue for SaaS businesses with strong net retention. This is the only category where revenue multiples dominate — because recurring revenue with low churn is the most valuable asset class in small business M&A.

E-commerce and retail: 2.0-4.0x SDE for established brands with diversified traffic sources. Amazon-dependent businesses (FBA) trade at a discount because one algorithm change can destroy the business overnight.

Why Your Revenue Number Alone Means Nothing

I meet owners all the time who say, "My business does $3 million in revenue." They expect me to be impressed. I'm not — because I don't know what it earns.

A $3M revenue business with 25% margins earns $750K and might sell for $2-3M. A $3M revenue business with 5% margins earns $150K and might sell for $300-450K. Ten times the difference in sale price, same top line. Revenue is vanity. Earnings are sanity. Buyers write checks based on earnings.

The exception is high-growth SaaS and technology businesses where investors pay revenue multiples because they're betting on future earnings. For every other business type, if you lead with revenue, you're signaling that you don't understand how valuation works — and that makes sophisticated buyers nervous.

The Emotional Value Gap

Here's what nobody tells you: the business you built is worth more to you than it is to anyone else. You remember the 80-hour weeks getting it off the ground. You remember the client you almost lost who became your biggest account. You remember the pandemic and how you kept everyone employed.

A buyer doesn't care about any of that. A buyer is making an investment decision. They're asking one question: "What return will I get on the capital I deploy to acquire this business?" They want 20-30% cash-on-cash returns, which means they need to buy at a price that makes the math work.

The owners who get the best outcomes are the ones who learn to separate emotional value from financial value early in the process. Your business changed your life. That doesn't mean it's worth $10 million.

What Kills Your Sale Price

I've written extensively about things that destroy business value, but the biggest culprits I see over and over are:

Owner dependency.If the business can't function without you for two weeks, it's not really a business — it's a job. Buyers know this and will either walk away or demand a steep discount with an extended earn-out to manage the transition risk.

Customer concentration.If any single customer represents more than 20% of revenue, your sale price will take a hit. If one customer is 40%+ of revenue, some buyers won't even make an offer.

Messy financials.If your books mix personal and business expenses, if your tax returns don't match your internal reports, if you can't explain every add-back — buyers lose confidence. And when buyers lose confidence, they either cut their offer or walk away.

Declining trends.Two years of declining revenue or margins will scare off most buyers. They're buying future cash flows, not past performance. If the trend line is going down, expect your multiple to compress.

What You Should Do Right Now

If you're seriously thinking about selling, here are the steps that will give you the most accurate picture of what your business is worth:

1. Calculate your actual SDE or EBITDA. Start with your tax return. Add back your salary, benefits, personal expenses, one-time costs, depreciation, and interest. That number — not your revenue — is the starting point for your valuation.

2. Understand your industry's multiple range. Look at comparable transactions in your industry and size bracket. A $500K SDE landscaping company trades at a different multiple than a $5M EBITDA landscaping company. Size matters enormously.

3. Be honest about your weaknesses. Customer concentration, owner dependency, deferred maintenance, key employee risk — a buyer will find all of these in due diligence. Better to know them now and address what you can.

4. Get a professional valuation.Not from your CPA (they don't do deals). Not from a business broker trying to win your listing (they'll inflate to get you to sign). Get an independent valuation from someone who understands your industry and has access to real transaction data.

5. Give yourself time. The owners who get the best prices are the ones who start preparing 18-24 months before they go to market. That gives them time to fix problems, grow earnings, reduce owner dependency, and run a competitive process.

The Bottom Line

Your business is worth what a qualified buyer will pay for it in a competitive process. Not what your neighbor sold for, not what a broker promised to get you, and not what you need for retirement. The market doesn't care about your plans — it cares about earnings, risk, and growth.

The good news is that most of the factors that drive value are within your control. Clean up your books, reduce concentration risk, build a team that doesn't depend on you, and give yourself enough runway to run a proper process. Do those things, and you'll be in the best possible position when the time comes.