Australia guides

Business valuation multiples by industry

A valuation multiple (earnings x a number) is a shortcut, and the "right" number varies hugely by industry because industries carry different risk, owner-dependence and revenue reliability. This guide sets out typical Australian SME multiple ranges by industry and explains why the earnings basis you apply the multiple to — EBITDA, PEBITDA or SDE — can move the result as much as the multiple itself.

By the bizflip team · Published 29 August 2026 · Facts checked 29 August 2026 · Sources listed below

How a valuation multiple works

A valuation multiple is a shortcut: take a measure of earnings (sometimes revenue) and multiply it by a number to get an estimated price. business.gov.au lists this alongside asset-based valuation, cost-to-recreate and future-profit projections as one of several standard methods — not a stand-alone formula. Business Queensland groups the same idea under three broad approaches: market-based (what comparable businesses actually sold for), income-based (projected future earnings and risk) and asset-based (assets minus liabilities). The multiple itself comes from real comparable sales, adjusted for how risky or reliable this particular business's earnings are.

Why the multiple moves by industry

The same dollar of earnings is worth more in some industries than others, because a buyer isn't really pricing the earnings — they're pricing how confident they can be that the earnings keep coming. Five things drive that confidence up or down:

• Risk and cyclicality — businesses exposed to discretionary spending, interest rates or a single regulatory change carry more uncertainty, and buyers discount for it.
• Owner-dependence — if the business can't run without the current owner working full-time in it, a buyer is effectively purchasing a job rather than an income stream, and pays less for it.
• Recurring versus one-off revenue — contracted, subscription or repeat-client income is easier to forecast than lumpy project work, so it supports a higher multiple.
• Capital intensity — businesses that need heavy, ongoing spending on equipment or stock convert less of their earnings into cash the owner can actually take out, which pulls the multiple down.
• Scale — larger, management-run businesses typically trade on materially higher multiples than a small owner-operated business in the same sector. Nash Advisory, for example, puts mid-market technology businesses at roughly 5x–15x EBITDA and tourism operators at 7x–13x — well above what a single-site small business in either industry would see.

Typical Australian SME multiple ranges by industry

The ranges below are the per-industry bands published by valuation firm Expert Business Valuations from Australian transaction data, quoted line for line. Which earnings measure each band applies to varies by industry (the next section explains the difference). Treat them as a starting point, not a quote — actual multiples for a specific business can sit outside these bands depending on the factors above.

A well-run café with a long lease, low staff turnover and stable trade sits at the top of its range. A business the owner is exiting because trade has been declining sits at the bottom — if it sells at that multiple at all.

EBITDA, PEBITDA or SDE: the earnings basis moves the number as much as the multiple

Before a multiple means anything, you need to agree what "earnings" means — and in small business sales that isn't obvious. Three measures turn up in Australian listings:

• EBITDA — earnings before interest, tax, depreciation and amortisation. It assumes the business is run by paid management, so it does not add back the current owner's own wage.
• PEBITDA (Proprietor's EBITDA) — EBITDA plus the working owner's salary and other owner-specific benefits added back. Used for owner-operated Australian SMEs, where the buyer is effectively buying themselves a job as well as an asset.
• SDE (Seller's Discretionary Earnings) — a term more common in the US but widely used here too, covering close to the same ground as PEBITDA: the total financial benefit available to one full-time owner-operator.

Because PEBITDA and SDE include a wage that EBITDA excludes, the earnings figure is larger under those measures — but the multiple applied to it is usually lower, since a buyer taking on an owner-operator role is also taking on more personal risk. Applying an EBITDA-style multiple to a PEBITDA-style earnings figure inflates the resulting valuation, sometimes substantially. Which measure is appropriate depends on the buyer scenario — an owner-operator purchase or a management-run acquisition — not on which figure happens to look better.

Why one multiple is never the full answer

A multiple range narrows the conversation; it doesn't set the price. business.gov.au is explicit that there is no single valuation method and that a proper assessment usually combines more than one approach. Within — or outside — the ranges above, several things move the final number:

• How verifiable the add-backs are — adjustments an accountant can defend against invoices and bank records carry more weight than ones a seller simply asserts.
• Deal structure — an asset sale, a share sale, vendor finance or an earn-out all change what a buyer is actually paying for, and when.
• Customer or supplier concentration — one client on a short contract is a bigger risk than the headline multiple alone captures.
• Working capital and stock — how much of that the buyer needs to fund on top of the purchase price.
• How many buyers are actually competing for the business at the time it's sold.

Treat any multiple — including the ranges above — as a starting range for a conversation, not a valuation. For anything beyond a rough estimate, and for anything touching tax (capital gains, GST on the sale, how the deal is structured), get an accountant, business adviser or licensed valuer involved; the right treatment depends on your own circumstances. Listing a business for sale on bizflip is free.

Sources

Every load-bearing claim in this guide, and where it comes from:

• There is no single business valuation method; standard approaches include market-based, income-based and asset-based valuation, and professional advisers (accountants, brokers, valuers) are recommended for a proper assessment. — business.gov.au (Australian Government)
• Business valuation approaches for selling in Australia group into market-based, income-based and asset-based methods, and no single method is treated as definitive on its own. — Business Queensland (Queensland Government)
• Typical Australian SME valuation multiple ranges by industry (retail/cafés, hospitality, trades, automotive, professional/allied health, childcare/aged care/NDIS, technology). — Expert Business Valuations
• Definitions of EBITDA, PEBITDA and SDE, how each is used for different buyer scenarios in Australian business sales, and how the earnings-basis choice changes the resulting valuation. — Expert Business Valuations
• Larger, management-run businesses trade on materially higher EBITDA multiples than small owner-operated equivalents in the same industry (e.g. mid-market technology roughly 5x-15x EBITDA, tourism 7x-13x). — Nash Advisory

Ready for your own number? The valuation calculator is free and ungated, and its methodology is public.