Australia guides

What EBITDA multiple does a small Australian business sell for?

No public record of Australian small business sale prices exists, so any EBITDA multiple you read is an adviser's estimate rather than a measured market figure. Australian adviser-published ranges put businesses under about A$1 million of EBITDA at roughly 1.5 to 4 times normalised EBITDA, rising with size, with hospitality and retail at the bottom and healthcare, professional services and technology towards the top. Before applying any of them, deduct a market wage for the owner's role: an EBITDA multiple applied to an owner-inclusive profit figure overstates the business.

By the bizflip team · Published 3 September 2026 · Facts checked 3 September 2026 · Sources listed below

Ask three advisers what EBITDA multiple a small Australian business sells for and you will get three ranges, none of them drawn from a public dataset, because no such dataset exists. The ranges are still useful, provided you read each one for the size of business and the definition of earnings it describes. This page explains what the multiple prices, what is published and by whom, and how to triangulate a figure from evidence you can check.

What an EBITDA multiple actually prices

EBITDA is earnings before interest, tax, depreciation and amortisation. Stripping those four items out removes the effect of how the business is financed and how its assets are written down, so two businesses can be compared on their trading alone; Value My Business Australia describes it as the standard metric used by Australian business brokers, M&A advisers and acquirers. A broker's appraisal, as Stockbridge Business Brokers describes it, normalises EBITDA by removing one-off and non-recurring items to reflect ongoing earning capacity, then multiplies by a figure that reflects what buyers are paying for similar businesses.

The multiple prices the whole operating business: goodwill, plant and equipment, systems, staff and customer relationships. Whether stock, work in progress and working capital sit inside that price or are added on top is a matter of negotiation, and it changes the headline multiple without changing the business. When a broker quotes you a multiple, ask what the price it was drawn from included.

The owner's wage problem

For a corporate business, EBITDA already carries the cost of every person who runs it, because the managers are employees. For an owner-operated business it usually does not, because the owner takes drawings rather than a wage, or a wage set for tax reasons rather than market ones. The figure you get by adding back the owner's wage and personal benefits is seller's discretionary earnings, or in Australian usage PEBITDA. Wall Street Prep describes SDE as the normalised operating profitability of small to mid-sized businesses, distinguished from EBITDA by its adjustments to the owner's salary and discretionary spending, and notes it is used mainly for smaller companies while EBITDA is applied to businesses of all sizes.

The consequence is simple. A true EBITDA figure for a small business has a market wage for the owner's role deducted from it, because the buyer will either do the job unpaid or pay someone to. Apply an EBITDA multiple to an owner-inclusive figure and you have overstated the business, often by a full year's earnings. The SDE versus EBITDA guide sets out the adjustment; do it before you read any range on this page.

The published Australian ranges, by size

Size is the first thing every Australian source sorts by, and it moves the multiple more than industry does. The ranges below are quoted from the publishers on their own terms.

The last row is there for contrast. Multiples of eight, twelve or eighteen are real, but they describe businesses with several million dollars of EBITDA sold through a competitive process to private equity or strategic buyers. Oliver Group is explicit that its own table calibrates expectations rather than evidencing a value, and that Australian private transaction data is incomplete, self-reported and lags the market by months. creditte says plainly that there is no comprehensive public database of Australian SME transaction multiples equivalent to those available in the US.

By sector

Within a size band, sector ranking is consistent across publishers even where the numbers differ. Verus Advisory & Assurance quotes EBIT multiples from 1x–2x for hospitality and 1x–2.5x for retail, through 2x–4x for professional services and manufacturing, to 3x–6x for healthcare and 4x–10x or more for technology. Lloyds Corporate Brokers' EBITDA ranges run from 2x–4x for retail to 4x–8x for healthcare and for eCommerce and IT, though Lloyds does not state the data its ranges rest on. In both, businesses whose earnings depend on a location, a lease and the person behind the counter sit at the bottom, and businesses with contracted revenue and transferable systems sit at the top. Our multiples by industry guide quotes a further Australian valuer's bands line by line.

What moves the multiple

• Owner independence. PieLAB puts it directly: what the buyer is pricing is what the business does after you stop. A business that runs through its owner is priced as a job.
• Quality of revenue. Recurring, contracted or repeat revenue is worth more per dollar of EBITDA than project work that has to be re-won.
• Defensibility of market position. PieLAB's third factor: proprietary IP, a niche position competitors find hard to replicate, or switching costs that keep customers in place price in protection that a less-defended competitor does not have.
• Customer concentration and management depth. Nash Advisory lists depth of the management team, geographic coverage, brand recognition, size and scale, and reliability of earnings as factors that add or detract between 0.5x and 1.5x. Lloyds gives the same span and adds location, with major-city businesses attracting higher multiples than rural ones.
• Records. Verus lists clean financial records and documented systems among the drivers that lift a multiple, because they lower the buyer's due-diligence risk.
• How the business is sold. Lyndon Advisory reports that a competitive auction consistently achieves 15–25% higher multiples than a bilateral negotiation. That is mid-market evidence, but one buyer sets a lower price than three at any size.
• When. Lyndon also notes that Australian EBITDA multiples have compressed from their 2021–22 peak. A range from an older article may describe a market that has moved.

PieLAB reports that recent Australian valuation work puts the combined effect of revenue quality, owner independence and defensibility of market position at half a turn to one and a half turns of EBITDA in either direction on the same earnings base, which on a business earning A$400,000 of normalised EBITDA is a swing of A$200,000 to A$600,000 in price.

How to triangulate a multiple for your business

No single free source will give you the number, but four of them together will give you a defensible range.

• Adviser ranges matched to your size and basis. Take the two sources above whose scope fits your EBITDA, apply the low and high of each, and treat the spread as your working range. Do not average rows that describe different markets.
• Listed-company multiples as a ceiling. Aswath Damodaran of NYU Stern publishes free enterprise-value-to-EBITDA multiples by industry every January, including a combined Australia, New Zealand and Canada dataset. These are public-company figures and sit well above what an owner-operated business fetches, but they show how the market ranks industries from a source with no listing to win.
• Current asking prices as a ceiling of a different kind. Listings tell you what sellers in your category believe they can ask, not what they settle for; the gap between the two is the number nobody publishes.
• A broker with access to settled prices. Members of the Australian Institute of Business Brokers can consult Bizstats, which the institute describes as Australia's largest database of completed business sales and which is exclusive to its members. An obligation-free appraisal from a member broker is the only free route to that evidence; ask which comparable sales the figure rests on.

Before any of that, check the inputs. If the business sells directly to consumers, the ATO's small business benchmarks let you compare cost-of-sales and expense ratios against similar businesses in the same industry and turnover band. They produce no multiple, but a profit figure outside the benchmark range needs explaining before anyone multiplies it. Our guide on free data on Australian sale multiples covers what else the ABS, ATO and ASIC publish.

A worked illustration

Suppose an owner-run trade services business shows A$300,000 of profit before the owner's drawings, and a manager to do the owner's job would cost A$110,000 including on-costs. Normalised EBITDA is A$190,000. On creditte's micro band of 1.5x–2.5x that is A$285,000 to A$475,000. Had the owner applied the 2.5x–4x small-business band to the A$300,000 owner-inclusive figure, the range would have read A$750,000 to A$1.2 million, and the first serious buyer would have walked. The figures are invented; the error is common.

When a range is not enough

Everything above produces an appraisal, not a valuation. The ATO's guidance on market valuation for tax purposes says acceptability usually depends on the process undertaken rather than who conducted it, but that a report by a suitably qualified professional following industry standards is considered more reliable, and that professional valuers must also comply with APES 225. Accountants in the professional bodies work under that standard whenever they provide an estimate of value. For a bank, a partner buyout, a family law matter or a tax position, commission a valuation from an accountant or a registered business valuer rather than relying on any range on this page. business.gov.au's advice is the same: get professional advice through your accountant, a business adviser or a business broker. Our guide to how much a business is worth covers the full method.

Sources

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

• EBITDA is 'Earnings Before Interest, Taxes, Depreciation, and Amortisation' and 'the standard metric used by Australian business brokers, M&A advisors and acquirers'. — Value My Business Australia (Spark Equity)
• An appraisal 'is often based on normalised EBITDA', 'with one-off or non-recurring items removed to reflect the business's ongoing earning capacity', then multiplied by 'a figure known as a "multiple", which reflects what buyers are willing to pay for similar businesses'. — Stockbridge Business Brokers
• 'Seller's Discretionary Earnings (SDE) measures the normalized, operating profitability of small to mid-sized businesses'; SDE 'includes adjustments to the owner's salary, including the discretionary spending of company funds on personal expenses' which EBITDA does not; SDE is used primarily for smaller companies while EBITDA 'is used to analyze companies of all sizes'. — Wall Street Prep
• Micro businesses (under $250k EBITDA) 'typically 1.5x – 2.5x'; small businesses ($250k – $1m EBITDA) 'typically 2.5x – 4x'; mid-market ($1m – $5m EBITDA) 'typically 3.5x – 6x'; 'Above $5m EBITDA: often 5x+ depending on sector and growth profile'; 'There is no comprehensive public database of Australian SME transaction multiples equivalent to those available in the US market'; 'All ranges are indicative and based on market observation.' — creditte
• Oliver Group's table covers EBITDA bands under $500k, $500k–$1m and $1m–$5m; businesses above $5m EBITDA 'increasingly attract private equity and strategic acquirers and trade on different evidence'; 'Australian private transaction data is incomplete, self-reported, and lags the market by months'; 'The table calibrates expectations; it does not evidence a value.' — Oliver Group
• 'For established Australian service businesses, current market reporting puts the typical range somewhere between three and six times normalised EBITDA'; 'what the buyer is pricing is what the business does after you stop'; the three factors are 'the quality of the revenue itself', 'the dependence of the business on the owner' and 'the defensibility of the market position' ('proprietary IP, a niche position competitors find hard to replicate, switching costs that keep customers in place'); 'Recent Australian valuation work suggests these factors can shift the multiple by half a turn to one and a half turns in either direction.' — PieLAB
• Mid-market Australian multiples for '$2M–$50M EBITDA, competitive process, Q1–Q2 2026': manufacturing 4–7x, professional services 5–9x, healthcare 7–12x, SaaS 8–18x; 'a competitive auction consistently achieves 15-25% higher multiples than bilateral negotiations'; 'EBITDA multiples in Australia have compressed from 2021-2022 peak levels'. — Lyndon Advisory
• Reported Australian sector EBIT multiples: hospitality 1.0x–2.0x, retail 1.0x–2.5x, trade services 1.5x–3.0x, professional services 2.0x–4.0x, manufacturing 2.0x–4.0x, healthcare/medical 3.0x–6.0x, technology/SaaS 4.0x–10.0x+; drivers include 'documented systems and processes, clean financial records'. — Verus Advisory & Assurance
• Lloyds publishes EBITDA ranges by sector (retail 2–4x, tourism 3–5x, transport and logistics 3–6x, education 3–6x, financial services 4–6x, eCommerce and IT 4–8x, healthcare 4–8x), says 'Several factors can add or detract between 0.5x to 1.5x on a multiple', notes major-city locations affect valuations positively and rural locations give a more modest multiple, and does not disclose the basis of its figures. — Lloyds Corporate Brokers
• 'Depth of the management team', 'Geographic coverage', 'Strong brand recognition in the market', 'Size and scale' and 'Reliability of revenue and earnings (recurring or once-off)' can 'add or detract between 0.5x-1.5x on a multiple for a particular company'. — Nash Advisory
• Damodaran's current data page lists enterprise value multiples of EBIT and EBITDA by industry group for the US, Europe, Japan, Australia/NZ/Canada, emerging markets and global, updated once a year in the first two weeks of January, as free downloads. — Aswath Damodaran, NYU Stern School of Business
• The AIBB describes Bizstats as 'Australia's Largest Database of Completed Business Sales', 'Exclusive to AIBB Business Broker Members'. — Australian Institute of Business Brokers
• 'A qualified business broker will provide you with an obligation free, pre-sale appraisal of your business.' — Lloyds Corporate Brokers
• 'The 2023–24 small business benchmarks help you compare your business's performance against similar businesses in the same industry.' — Australian Taxation Office
• 'Small business benchmarks are currently limited to businesses that supply goods and services directly to consumers.' — Australian Taxation Office
• 'For tax purposes, the acceptability of a valuation usually depends on the valuation process undertaken rather than who conducted it'; a report 'carried out by a suitably qualified professional following commonly-accepted industry standards ... is considered more reliable by us'; 'Professional valuers must also comply with additional valuation standards, such as APES 225 Valuation Services.' — Australian Taxation Office (Market valuation for tax purposes)
• APES 225 'applies to all members who provide an estimate of value for a business, business ownership interest, security, intangible asset, or other asset or liability'. — Accounting Professional & Ethical Standards Board (APESB)
• business.gov.au recommends getting professional advice on valuing a business 'through your accountant, a business adviser or a business broker'. — business.gov.au (Australian Government)

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