how much do companies sell for

So, you’ve built something. Maybe it’s a service-based company you started in your garage. Maybe it’s an online business that somehow kept growing while you juggled everything else in life. Or maybe you’re just curious — not ready to sell yet, but wondering… what’s this thing worth if I walked away tomorrow?

You’re not alone. Business owners think about value more often than they admit — sometimes out of curiosity, sometimes out of exhaustion, and sometimes because opportunity comes knocking. But figuring out how much do companies sell for isn’t as simple as plugging numbers into a calculator.

Spoiler alert: it’s part science, part storytelling, and a whole lot of context.

It’s Not Just Revenue — It’s EBITDA That Gets Attention

If you’ve spent even five minutes reading about business valuations, you’ve probably seen EBITDA thrown around like confetti. It stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. Sounds technical, but really, it’s just a cleaner look at your operating profits — without the distractions of how your business is financed or taxed.

In most mergers and acquisitions (M&A) conversations, EBITDA becomes the gold standard. Why? Because it offers a more comparable number across industries and ownership styles.

But here’s the kicker: the real magic happens when you multiply it. And that brings us to m&a ebitda multiples, which are the secret sauce behind most business sales.

Let’s say your business generates $400,000 in EBITDA. Depending on your industry, growth trajectory, systems, and perceived risk, you might get a 3x multiple… or a 6x… or even more. That turns your $400K into a sale price anywhere from $1.2 million to $2.4 million (and beyond, in some cases).

Same earnings — wildly different valuations — just based on how your business looks through the buyer’s eyes.

So… How Are These Multiples Decided, Anyway?

Ah, the million-dollar question. Literally.

The multiple is where the “soft stuff” kicks in — things that don’t show up on your income statement, but absolutely influence your value. Things like:

  • How reliant is the business on you as the owner?
  • Is there recurring revenue?
  • Are your financials clean and audited?
  • Is your customer base diversified or dangerously narrow?
  • What’s the growth potential in your space?
  • Is your team stable and independent?

Once all those factors are weighed, buyers land on a multiple — a number that feels fair based on risk, opportunity, and market comps.

And yep, you can totally reverse-engineer it too. Using an ebitda multiple calculation, take the asking price or offer amount and divide it by EBITDA. That shows you how the market is valuing the business — and whether it’s high, low, or just right compared to others in the same arena.

Why Two Similar Businesses Can Have Totally Different Prices

Picture this: two eCommerce companies both making $300,000 in EBITDA. One sells for $900K. The other for $1.8M.

What gives?

Maybe the second has a loyal subscriber base, automated fulfillment, and a brand with real equity. Maybe the first is run entirely by the founder, has no repeat customers, and uses a patchwork of software tools that only he understands.

Same earnings. Different story. And that’s the point.

Buyers aren’t just buying your numbers — they’re buying what those numbers mean for them. Can they grow it? Can they replace you? Can they count on next year looking as good as this one?

That’s the emotional side of valuation. And it matters — a lot.

Common Multiples by Industry (But Take These Lightly)

Here’s a loose guide, though it changes with the market:

  • Service businesses: 2x–4x
  • Online/digital businesses: 3x–6x
  • Manufacturing: 4x–7x
  • Healthcare or SaaS: 5x–10x+

These are starting points, not promises. The real number is shaped by all the stuff behind the scenes — systems, people, processes, risk, and trust.

What to Do If You’re a Seller (and Want a Higher Multiple)

Let’s be honest: nobody wants to sell low. If you want the upper end of the range, or even exceed it, you’ve got to reduce risk and increase buyer confidence.

That means:

  • Clean, verifiable financials
  • SOPs that show someone else can run the business
  • A strong team (that isn’t planning to leave)
  • Recurring or predictable revenue
  • Growth opportunities you haven’t tapped yet
  • No red flags (like customer concentration or legal messes)

It’s not about perfection — it’s about predictability. The more stable and scalable your business looks, the better your multiple.

If You’re a Buyer, Don’t Fall in Love With a Number

Buyers, this one’s for you: don’t obsess over multiples in isolation. Focus on quality of earnings. Dig into the story behind the numbers. Ask tough questions. Be skeptical when the add-backs feel too generous.

A 3x on $200K is still $600K. But if that $200K disappears once the founder steps out? It’s not really worth it, is it?

Buy smart, not just cheap.

Final Thoughts: It’s a Number — But It’s Also a Narrative

Here’s the truth about business valuation: it’s not just about what your business made last year. It’s about how that performance translates into the future — without you in the picture.

So whether you’re asking how much do companies sell for, calculating your EBITDA multiple, or just exploring M&A EBITDA multiples in your space, know this: