secure moneyMATH

Valuation Multiple

A valuation multiple is shorthand for what the market pays for a dollar of earnings or revenue in a specific business type. A 3x SDE multiple means buyers pay $3 for every $1 of SDE the business produces. Multiples are set by comparable transactions — what similar businesses actually sold for — not by formulas or theory. They vary by industry, size, growth, and risk profile.

Example

A SaaS business with $400K SDE at a 4.5x multiple is valued at $1.8M. The same $400K SDE in a consulting firm at 2.0x is valued at $800K.

Related calculator

Open Income Tax Calculator →

Related Topics

Business Valuation for Digital Businesses

A small digital business is typically worth its Seller's Discretionary Earnings (SDE) multiplied by an industry-specific multiple. In 2026, multiples range from 1.5x for consulting firms to 6.0x for SaaS businesses, depending on business type, growth, recurring revenue, and owner dependency.