The cheapest earnings in the US small business market are not in the smallest businesses. They sit in the middle, in companies earning between $100,000 and $250,000 a year, which ask a median of 2.50 times earnings. Smaller businesses ask more. Larger ones ask more. We measured this across 62,982 active listings, and it has consequences for anyone on either side of a deal right now.
The usual headline for this market is that small businesses sell at about three times SDE. Our data agrees, and the figure is close to useless on its own. Once you split by size, the multiple moves enough to change what a deal is worth and where the return comes from.
The size curve
| Seller's discretionary earnings | Listings | Median SDE | Median asking price | Median multiple |
|---|---|---|---|---|
| Under $100k | 22,383 | $60,000 | $250,000 | 3.52x |
| $100k to $250k | 22,797 | $150,000 | $375,000 | 2.50x |
| $250k to $500k | 9,749 | $318,472 | $985,000 | 2.85x |
| $500k to $1M | 4,157 | $625,000 | $2,200,000 | 3.29x |
| $1M to $2.5M | 1,838 | $1,299,265 | $5,000,000 | 3.79x |
Two things are happening at once.
Above $100,000 of earnings the multiple climbs steadily, from 2.50x to 3.79x. This is the size premium that brokers and lenders describe, and the reasons are familiar: larger businesses depend less on the owner personally, qualify for more financing, and draw from a deeper pool of buyers who can actually close.
Below $100,000 the curve turns back up, to 3.52x. Our data says what these businesses ask, not why, so what follows is inference. A business earning $60,000 and asking $250,000 has probably been priced from what the owner sees when they look around: a van, a stock of inventory, some equipment, a lease. The multiple is a number you can calculate afterwards rather than the basis anyone used. Sellers at this size are also less likely to have had a broker set the price.
Growing earnings pays twice
Read the table down the columns rather than across, and the interesting part appears.
Between the $100k to $250k band and the $1M to $2.5M band, median earnings grow from $150,000 to $1,299,265, which is 8.7 times. Median asking price over the same span grows from $375,000 to $5,000,000, which is 13.3 times.
Earnings grew 8.7x. Price grew 13.3x. The difference is the multiple expanding underneath you as you climb.
For an owner planning an exit, this is the argument for waiting. Taking a business from $150,000 of SDE to $625,000 is roughly four times the earnings, and it moves the median asking price from $375,000 to $2,200,000, which is closer to six times. The extra comes from re-rating, and you only collect it by crossing into the next band rather than by improving how you present the same numbers.
For a buyer the same mechanic is the return. Buying in the cheapest band and growing a business into the next one earns money twice, once from the added earnings and once from the higher multiple those earnings now command. This is the arithmetic behind most acquisition-and-growth strategies, and the table puts a size on it.
The catch is that the cheapest band is also the most crowded. There are 22,797 active listings in the $100k to $250k range, the largest band in the data. Everyone can see the same opportunity.
Industry matters less than buyers expect
Fourteen sectors have at least 800 listings in the measured set, grouped by the two-digit NAICS code each listing carries.
| Sector | Listings | Median multiple | Median asking price |
|---|---|---|---|
| Information | 857 | 3.68x | $250,000 |
| Real estate, rental, leasing | 1,064 | 3.38x | $300,000 |
| Manufacturing | 4,669 | 3.29x | $400,000 |
| Arts, entertainment, recreation | 1,584 | 3.21x | $250,000 |
| Wholesale trade | 2,616 | 3.12x | $335,000 |
| Transportation and warehousing | 1,937 | 3.12x | $700,000 |
| Other services (repair, personal care) | 8,163 | 3.00x | $250,000 |
| Retail trade | 10,829 | 3.00x | $250,000 |
| Educational services | 834 | 2.97x | $250,000 |
| Construction | 3,984 | 2.85x | $500,000 |
| Professional and technical services | 2,182 | 2.85x | $420,000 |
| Accommodation and food services | 13,456 | 2.83x | $275,000 |
| Administrative and support services | 3,742 | 2.80x | $260,000 |
| Health care and social assistance | 4,565 | 2.54x | $465,000 |
Top to bottom, the range across sectors is 1.14 turns of earnings. Within the market as a whole, the gap between the 25th percentile listing at 1.98x and the 75th at 4.94x is 2.96 turns.
The spread inside any industry is more than twice the spread between industries. Choosing a sector does less to the price you pay than the specifics of the individual business, and considerably less than its size. A buyer who rules out a whole industry on multiples is optimizing the smaller variable.
Health care is the clearest example of why sector averages mislead. It carries the second-highest median asking price in the table at $465,000 and the lowest multiple at 2.54x. Those businesses cost more because they earn more, not because the market prices them richly.
Accommodation and food services is worth knowing for a different reason. At 13,456 listings it is more than one in five of everything measured. If browsing listings feels like an endless procession of restaurants, that is the market, not your filters.
The asking price is a soft number
None of the above is much use if the asking price is where deals actually land. It is not.
Our system records changes to a listing over time, including price. Restricting to the 13,417 listings that changed their asking price exactly once, which is the cleanest signal of a real decision rather than a data artifact:
| Count | Share | |
|---|---|---|
| Price cuts | 11,997 | 89.4% |
| Price raises | 1,420 | 10.6% |
The median cut is 35% of the original asking price.
When a seller moves, they almost always move down, and they move a long way. A third off is not a negotiation, it is a repricing. A buyer on r/smallbusiness described the same pattern from the other side:
"It seems like a lot of owners need about 5 offers around a reasonable multiple before they're ready to readjust their exceptions down to the true market rates."
Most listings never record a price change at all, so this does not predict any particular deal. What it does say is that the number on the listing carries less information than its precision suggests. Treat the multiples above as a map of where sellers start.
For an owner, the same finding is a warning about pricing high to leave room. On the listings where the opening number got tested, it turned out to be about a third too high.
If you are buying
Size your target band before you shortlist anything. The difference between buying at 2.50x and 3.29x is larger than any industry choice you will make, and it is knowable in advance.
Expect competition where the price is best. The $100k to $250k band is the cheapest and the most crowded at once, so speed and preparation matter more there than screening skill.
Underwrite the earnings rather than the multiple. Within any band the spread is wide enough that the benchmark tells you almost nothing about whether a specific business is fairly priced.
Read a high multiple on a very small business as a pricing method rather than a premium. Under $100,000 of earnings, ask what assets the number is built from.
If you are selling
The lever is earnings size, not presentation. Crossing from one band into the next re-rates the multiple, and that is worth more than anything you can do to the listing copy.
Price to be tested. On listings where the opening number was tested, it moved down by about a third, and a price that sits unexamined for months costs you more than a realistic one.
Know which side of $100,000 you are on. Below it, buyers will read your price as an asset valuation and will want to know what they are actually getting.
Notes on the data
These are asking prices. Sellers publish what they want; marketplaces generally stop reporting once a listing comes down, so closed sale prices are not available to us or to most published research. Treat every multiple here as a starting position rather than a clearing price.
The set is 62,982 active US listings carrying both an asking price and either SDE or annual cash flow, bounded to prices between $25,000 and $25 million and earnings between $10,000 and $10 million. The bounds matter because the raw data contains real listings that are not small businesses, including a 92-hotel portfolio at $5.5 billion. That is also why every figure here is a median rather than a mean. For multiples we dropped anything above 20x earnings, about 2.4% of the set.
Two things we are not claiming. The band above $2.5M of SDE returned 2.00x on only 554 listings, too thin and too mixed to report. And the 89% cut figure holds only for listings that changed price exactly once. Reading all 128,792 recorded price changes instead gives a 57% to 43% split, which is an artifact: 76% of those changes come from listings that changed more than ten times, and one records 329 changes across just 18 distinct values. That is a listing being re-read, not a seller changing their mind.
If you want the live version of this rather than a snapshot, the same dataset sits behind Clef, filterable by industry, location, price, and earnings. For how buyers value a business once they have found one, see Business Valuation Methods for SMB Acquisitions. For where listings come from in the first place, see 13 Best Websites to Find a Business for Sale.
Frequently asked questions
What multiple do small businesses sell for?
Across 62,982 active US listings with both an asking price and an earnings figure, the median asking multiple is 3.0x SDE, with half of listings between 2.0x and 4.9x. That headline hides more than it tells, because the multiple moves with the size of the business. These are asking prices rather than closed sale prices.
Where are business earnings cheapest to buy?
In our data the lowest median multiple is 2.50x, in the band of businesses earning $100,000 to $250,000 of SDE. Both smaller businesses (3.52x) and larger ones (2.85x and up) ask more per dollar of earnings. That band is also the most crowded, with 22,797 active listings.
Do small business multiples really rise with size?
Yes, above about $100,000 of SDE. The median rises from 2.50x at $100k to $250k, to 2.85x at $250k to $500k, 3.29x at $500k to $1M, and 3.79x at $1M to $2.5M. Across those bands median earnings grow 8.7x while median asking price grows 13.3x, because the multiple expands as you climb.
Why do the smallest businesses ask higher multiples?
Businesses under $100,000 of SDE ask a median 3.52x, higher than every band except the largest. The likely reason is that very small businesses are often priced from assets such as equipment, inventory, or a vehicle rather than from earnings, so the multiple is a by-product of the asking price rather than the basis for it.
How negotiable is a small business asking price?
More than most buyers assume. Among 13,417 listings that changed their asking price exactly once, 89% of those changes were cuts, and the median cut was 35% of the original price. Sellers who move tend to move a long way.