NeoNox
For owners
What is my business actually worth?
For most businesses between $1M and $50M in revenue, the base rate is 2–4× normalized EBITDA. If your business earns $1M a year after adjusting for owner expenses, the honest starting range is roughly $2M–$4M. Two caveats worth their weight: some industries trade well above that band and some below it — and where you land inside your band is decided by three things you can actually control.
- Committed capital — proof of funds on request
- NDA before any documents change hands
- Texas-based, buying nationwide
The three levers
What moves your multiple
1. Can it run without you?
The single biggest driver. A business that runs 90 days without its owner is a company; one that can’t is a job with employees. Buyers pay company prices for companies.
2. Customer concentration
One customer above 20–30% of revenue is a discount waiting to happen. A diversified base can be worth a full turn of EBITDA more.
3. Clean, defensible numbers
Normalized EBITDA with documented add-backs, a growth trend that doesn’t need a story, and financials a quality-of-earnings review won’t unravel.
There's also a lever most owners never hear about: structure. If you want a higher headline price, you can trade for it — an earn-out, seller financing, tighter governance. We call it "your price, my rules — or my price, your rules."
Straight answers
What is a small business worth?
Most lower-middle-market businesses ($1M–$50M revenue) sell for 2–4× normalized EBITDA. Profitable, growing companies with a management team and diversified customers land at the top of that band; owner-dependent or customer-concentrated businesses land at the bottom — or below it.
What multiple of EBITDA do small businesses sell for?
The base rate at this size is 2–4× EBITDA. Multiples rise with scale — a $5M-EBITDA company commands more per dollar of earnings than a $500K one — and vary by industry: recurring-revenue, licensed, and healthcare businesses often trade above the base; project-based and capital-heavy work below it.
Do multiples differ by industry?
Significantly. The 2–4× band is the lower-middle-market average, not a rule. Software, healthcare, and contract-backed recurring revenue routinely command premiums; construction, restaurants, and equipment-heavy businesses often trade below the band. A serious buyer prices your sector, not the average.
What increases a business valuation the most?
Three things, in order: a leadership team that runs the business without the owner, no customer above roughly 20% of revenue, and clean financials with a defensible growth trend. Each can move the multiple more than any negotiation tactic.
How do I get a valuation without hiring a banker?
Normalize your EBITDA (add back owner salary above market, one-time costs, personal expenses), then apply 2–4× based on your size, growth, and risk profile. NeoNox’s free assessment produces an indicative range in three minutes, no email required.
Do buyers pay more for revenue or profit?
Profit — with rare exceptions for high-growth or recurring-revenue models that price on revenue multiples. A $10M-revenue business at 5% margins is usually worth less than a $4M business at 25%.