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 shows your tier and what moves your price 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%.