What Is My Business Worth? (2026)
Most small businesses sell for 2 to 3 times annual profit. Above about $2 million in price, that rises to 4 to 4.5 times. The median sale in 2026 came in near $349,000.
Three things surprise owners when they first see a real number:
- Size moves the price more than your trade does. The same dollar of profit is worth more at $5 million than at $400,000.
- Revenue is not the number. Buyers multiply profit, and your tax return understates it.
- If the business needs you daily, it is worth less. That one factor is worth turns, not decimals.
The Number Buyers Multiply
Buyers do not multiply revenue. They multiply profit, and which profit depends on your size.
Small businesses are priced on everything the business pays you in a year: your salary, your benefits, and the personal costs run through it. Advisors call that SDE.
Larger ones are priced on profit after paying a manager to do your job. That is the figure buyers call EBITDA.
- The switch happens around $1 million in price. Below it, your own pay counts as profit. Above it, a manager’s salary comes out first.
- Your tax return understates both. Add back one-time costs, your above-market pay, and anything personal the business covered.
- Every added-back dollar gets multiplied. On a 3 times multiple, finding $20,000 of add-backs is worth $60,000 at closing.
- You have to prove them. A number you cannot show on a statement comes straight back out.
What Businesses Sell For, by Size
These are the multiples brokers actually closed at in early 2026, from the Q1 2026 Market Pulse survey of 203 completed deals.
| Sale price | Priced on | Typical multiple | Months to close |
|---|---|---|---|
| Under $500K | What the business pays you | 2.0x | 6 |
| $500K to $1M | What the business pays you | 2.8x | 7 |
| $1M to $2M | What the business pays you | 3.0x | 9 |
| $2M to $5M | Profit after paying a manager | 4.0x | 9 |
| $5M to $50M | Profit after paying a manager | 4.5x | 9 |
Those are the middle of the market. Strong businesses in a wanted trade go well above them, and the rest of this page is about which side you land on.
Work Out a Rough Number Yourself
Five steps, and you can do it on one sheet of paper this evening.
- Take last year’s profit straight off the tax return.
- Add back your own salary and benefits.
- Add back anything personal: the truck, the phone, the family member on payroll.
- Add back one-time costs that will not repeat for a buyer.
- Multiply by the figure from the table above.
Business Valuation Calculator
A worked example
A shop turns over $900,000. The tax return shows $70,000 of profit, which feels like nothing after twenty years.
Add back $85,000 of owner pay, $15,000 of vehicle and phone costs, and a $10,000 legal bill that will not repeat. Real profit is $180,000.
At 2.8 times, that is roughly $504,000. The tax-return number would have suggested under $200,000.
What Your Industry Changes
Trade matters less than size, but it is not nothing. Businesses with repeat customers and contracts price above ones that sell a job at a time.
| Industry | You run it | A manager runs it | Full breakdown |
|---|---|---|---|
| HVAC | 2x to 3.5x | 5x to 10x | HVAC multiples |
| Plumbing | 2x to 4x | 4x to 7x | Plumbing multiples |
| Electrical | 2.5x to 4.5x | 5.5x to 13x | Electrical multiples |
| Dental practice | 5x to 8x | 8x to 14x | Dental valuation |
| Insurance agency | 1x to 1.8x commissions | 7x to 14x profit | Agency multiples |
Look at the second column against the third. Stepping back from daily work roughly doubles the multiple, on the same business, in the same year.
Six Things That Move Your Multiple
- Whether it runs without you. The single biggest lever, and the slowest to fix. Start two years out.
- Repeat revenue. Contracts and service agreements are money a buyer can count on, so they pay more for it.
- Customer spread. If one client is 30% of revenue, buyers price the risk that they leave with you.
- Clean books. Three years that tie out, with add-backs you can evidence line by line.
- Staff who stay. Tenure and licenses held by people other than you both get checked closely.
- Competing buyers. Not a feature of the business, and still the factor that moves the final number most.
The first five take a year or two. The last one takes a process, which is why approaching several buyers at once matters as much as any of the rest.
A Free Valuation or a Paid Appraisal?
They answer different questions, and most sellers only ever need the first.
| Type | Costs | Answers | Use it when |
|---|---|---|---|
| Market valuation | Free to $5,000 | What a buyer would pay today | You are deciding whether to sell |
| Formal appraisal | $5,000 to $25,000 | A defensible value on paper | Tax, divorce, partners, or a lawsuit |
| An actual offer | Nothing | What one real buyer will pay | Always, and get more than one |
What a paid appraisal buys you
A formal appraisal follows rules the IRS sets out in its business valuation guidelines. That rigor is what you are paying for, and it is wasted if you only want a price.
Once you have a number, the next question is what it costs to collect it. Compare what a broker charges against selling without one.
Frequently Asked Questions
Take your yearly profit, add back your own pay and any personal costs, then multiply. Under $1 million in price expect 2 to 3 times. Between $2 million and $50 million expect 4 to 4.5 times. The median 2026 sale was near $349,000.
Two times under $500,000, rising through 2.8 and 3 times as the price climbs toward $2 million. Above that, 4 to 4.5 times. Bigger businesses earn higher multiples because bigger buyers have cheaper money to spend.
Profit, almost always. Revenue only sets the frame. A business turning over $900,000 with $180,000 of real profit is worth roughly half a million. The same revenue with $60,000 of profit is worth a fraction of that.
They are costs the business carries that a new owner would not: your above-market pay, personal vehicles, one-time legal bills. Every dollar you can evidence gets multiplied. At 3 times, $20,000 of add-backs is worth $60,000 at closing.
Some, but less than size does. Trades with service contracts and repeat customers price above ones selling a job at a time. A dental practice runs 5 to 8 times profit while an owner-run plumbing shop runs 2 to 4.
Get yourself out of daily operations, build repeat revenue, spread your customers so no one client dominates, and keep three clean years of books. Each takes months, which is why sellers start two years before they list.
Only if you need a defensible number for tax, a divorce, a partner buyout, or a lawsuit. Those run $5,000 to $25,000. If you simply want to know what a buyer would pay, a market valuation answers it for free.
Usually yes, for a limited time. Buyers pay more when a handover is agreed, because the risk of customers leaving drops. A business that already runs without you is worth more still, and needs no handover at all.
Next Steps
- Pull last year's tax return and write down the profit figure.
- List every add-back you can evidence, and total it.
- Multiply by the figure for your size band, then treat the answer as a range.
- Check it against your trade's page above, because the spread between trades is real.
- Get a free valuation from people who buy businesses. No fee, no listing, no obligation to sell.