How much is my business worth?
Most Chicagoland businesses doing $1 million to $15 million in revenue are worth a multiple of their normalized earnings. Owner-operated companies typically sell for 1.6 to 3.6 times SDE. Larger companies with $1 million or more of EBITDA sell for about 3.7 to 4.5 times EBITDA. The multiple you get depends on what a buyer can verify.
Free, CPA-prepared, within two business days.
Revenue, industry, and where to send it. You get a working low and high for your business against the sources below, and the two or three items a buyer's accountant would raise first. Nothing to sign, nothing published.
If the honest answer is "wait two years and grow," you'll hear that.
Which earnings number does a buyer use, SDE or EBITDA?
A business is worth a multiple of its earnings, not its revenue. Two companies with $3 million in sales can be worth $900,000 and $2 million, because one keeps $300,000 and the other keeps $650,000. The first job in any valuation is to establish the right earnings number.
For an owner-operated company, buyers use Seller's Discretionary Earnings, or SDE: operating profit plus the owner's salary and benefits, plus the one-time and personal expenses run through the business. The line-by-line formula, with the add-backs a buyer's accountant accepts and rejects, is on how to calculate seller's discretionary earnings. It answers the question "what does one working owner take home from this company?" Once a business is large enough to need a paid management team, the convention shifts to EBITDA, which assumes market-rate managers are already in the cost base.
The line falls in a consistent place. The IBBA and M&A Source Market Pulse survey prices deals under $2 million in transaction value on SDE and deals from $2 million up on EBITDA (Q1 2026). If your discretionary earnings, your own pay included, run under roughly $500,000 to $1 million, expect to be priced on SDE.
Either number has to be rebuilt before a multiple is applied: owner pay to market, family payroll adjusted, related-party rent at fair value, one-time legal or insurance items removed, personal vehicles and travel taken out. A buyer's accountant will do this reconstruction from the bank statements up. A multiple applied to the wrong earnings number produces a price nobody can defend to a lender.
What multiple does a business like mine get?
Size moves the multiple more than industry does. The bands below are medians from the surveys buyers and lenders use, with the publisher and period for each. Industry ranges are in what Chicagoland businesses actually sell for; the closed-sale data for the Chicago metro is below.
| Deal size | Earnings basis | Typical multiple | Source |
|---|---|---|---|
| Under $500,000 | SDE | 2.0x | IBBA / M&A Source Market Pulse, Q1 2026 |
| $500,000 to $1 million | SDE | 2.8x | Market Pulse, Q1 2026 |
| $1 million to $2 million | SDE | 3.0x | Market Pulse, Q1 2026 |
| $2 million to $5 million | EBITDA | 4.0x | Market Pulse, Q1 2026 |
| $5 million to $50 million | EBITDA | 4.5x in Q1 2026, 5.8x in Q2 2026 | Market Pulse, Q1 and Q2 2026 |
| $1 million to $10 million of EBITDA | EBITDA | 3.7x to 4.5x | BVR DealStats Value Index, Q1 2025 |
Industry matters inside each band. Manufacturing and distribution businesses priced on SDE commonly trade at 2.7x to 3.1x (the buyer pool and the diligence checks are in selling a manufacturing business in Chicago); trade-services companies such as HVAC, plumbing and landscaping cluster around 2.3x to 2.6x at the median (BizBuySell industry benchmarks, businesses sold 2021 to 2025; who buys them and which licenses transfer is in selling a contracting or HVAC business in Chicago). Multiples step up with size, which is why the right answer for some owners is to grow for two years before selling.
What do Chicago businesses actually sell for?
The one published dataset of closed sales for the Chicago metro, with the period and the source. We refresh it when BizBuySell does.
In BizBuySell's closed-sale data for the Chicago metro (Chicago-Naperville-Joliet), 179 small businesses reported sold in 2024 at a median price of $307,482, an average of 2.43 times cash flow and 0.63 times revenue. Sellers received 92 cents on the asking dollar. Listings on the market in the third quarter of 2025 were asking 3.26 times cash flow.
| Chicago-Naperville-Joliet market | Closed sales, full-year 2024 | Active listings, Q3 2025 |
|---|---|---|
| Reported sales / listings | 179 | 678 |
| Median price | $307,482 sold (asking $342,500) | $400,000 asking |
| Median revenue | $636,289 | $750,410 |
| Median cash flow | $153,000 | $166,000 |
| Price to cash flow (average) | 2.43x | 3.26x asking |
| Price to revenue (average) | 0.63x | 0.83x asking |
| Sale price to asking price | 0.92 | — |
Source: BizBuySell Insight Report, Q3 2025, market tables for Chicago-Naperville-Joliet, IL-IN-WI. Nationally, businesses sold in Q3 2025 spent a median of 149 days on the market, and the median time to close for 2025 was 170 days (BizBuySell 2025 year in review).
Two things to read out of that table. First, the gap between what Chicago listings ask, 3.26 times cash flow, and what closed deals paid, 2.43 times. Sellers who priced on hope came down; the 0.92 sale-to-asking ratio is the average haircut. Second, these are Main Street transactions, median revenue under $700,000. The companies we represent, $1 million to $15 million in revenue, sit in the higher bands in the table above, where a working owner's earnings are priced at 2.8 to 3.0 times SDE and a managed company at 4 times EBITDA or more. The discipline is the same at every size: the price a buyer's accountant can verify is the price that closes. Price is also not the whole answer: in the second quarter of 2026 sellers of businesses under $50 million received 83 to 92 percent of it in cash at closing and the rest as a seller note or an earnout; how each is priced and taxed is in seller financing and earnouts in Chicago deals.
What are the five adjustments buyers make?
The surveys report what sold. A buyer's accountant decides where in the range your business lands, and they test the same five things every time. What buyers look for
- Financial credibility
- Books that reconcile to tax returns and bank deposits without reconstruction support the upper half of the range. Cash-basis books, or add-backs with no paper behind them, are a discount, and often a request for an earn-out.
- Owner dependence
- If you quote every job and hold every customer relationship, the buyer is pricing the risk of you leaving. A manager or lead technician who can run the business for a month without you is the most consistent premium in the trade-services data.
- Customer durability
- One customer above roughly 20 percent of revenue is the threshold most buyers and SBA lenders flag, and it lowers offers. Service agreements, contracts and repeat billing raise them.
- Team and process
- Written procedures, a CRM with the customer history in it, and controls that don't route through the owner. Buyers pay for a company they can operate, not a job they are buying.
- The deal file
- Leases, contracts, equipment lists, permits, and three years of clean statements assembled before diligence asks. Deferred maintenance on trucks, equipment or the building is a discount, because the buyer funds it out of the price.
A worked example: a $2.4 million HVAC company in Will County
The company is hypothetical and the assumptions are stated so you can swap in your own. Say it does $2.4 million in revenue with $380,000 of normalized SDE after a documented add-back review, and one working owner. BizBuySell's HVAC benchmark, built on 562 businesses sold between 2021 and 2025, runs from 2.0x to 3.3x SDE with a median of 2.6x. That is a raw range of $760,000 to $1.25 million, with the median at roughly $990,000. Market Pulse puts a deal of that size in the $500,000 to $1 million band at 2.8x, or about $1.06 million. The two sources agree, which is the first thing we check.
Now the two versions of the same company. In the first, the owner runs every estimate, a property manager accounts for 35 percent of revenue, and the books are on a cash basis. Each of those is a discount the surveys describe, and together they push the working range to the lower quartile, roughly 2.0x to 2.3x, or $760,000 to $875,000, likely with part of it held back in an earn-out.
In the second version, eighteen months later, a service manager quotes the residential work, 40 percent of revenue is on maintenance agreements, the property manager is under 20 percent because the rest of the book grew, and the books are on accrual with a monthly close. SDE has not changed. The applicable range is now the median and above, 2.6x to 3.1x, or about $990,000 to $1.18 million.
The gap between the two versions is roughly $250,000 on the same earnings. That is arithmetic on published ranges, not a prediction for any particular business, but it is the arithmetic a buyer's accountant will do. Every one of those fixes takes months, not weeks, which is why the value question is worth asking two years before you plan to sell.
Buyers pay for proof, not potential. The multiple is decided by what their accountant can verify, and most of that is decided in the two years before the sale.
Marc E. Marcus, Managing Advisor
Can I estimate what my business is worth myself?
Yes, to a range. Take pre-tax profit, add back one owner's salary and benefits, interest, depreciation and documented one-time expenses; that is SDE. Multiply it by 2.0 to 3.0 for an owner-run company, or 3.7 to 4.5 times EBITDA once a management team runs it. A business with $300,000 of SDE lands at $600,000 to $900,000 before a buyer's adjustments.
The arithmetic is three lines. Rebuild the earnings number first (the line-by-line formula and the add-backs a buyer's accountant accepts are on seller's discretionary earnings), pick the multiple band for the size of the deal, and multiply. The table uses the Market Pulse medians from the bands above and the 2.0x to 3.0x working range most owner-run Chicagoland businesses close inside.
| Earnings | Working range | Survey median |
|---|---|---|
| $200,000 SDE | $400,000 to $600,000 | 2.0x, about $400,000 (deals under $500,000) |
| $300,000 SDE | $600,000 to $900,000 | 2.8x, about $840,000 ($500,000 to $1 million) |
| $500,000 SDE | $1.0 million to $1.5 million | 3.0x, about $1.5 million ($1 million to $2 million) |
| $750,000 SDE | $1.5 million to $2.25 million | 3.0x; above $2 million buyers switch to EBITDA |
| $1,000,000 EBITDA, managed | $3.7 million to $4.5 million | 4.0x, about $4.0 million ($2 million to $5 million) |
What the three lines leave out is what moves the price. A buyer's accountant will reject add-backs you cannot document, discount a customer over 20 percent of revenue, price the working capital that has to stay in the company, and check that a lender will finance the number out of the same earnings. Those adjustments are the difference between the $760,000 and the $1.18 million in the Will County example above, and they are what the free value range and the Exit-Readiness Review are for.
How do I get an actual number for my business?
There are three levels, and most owners only need the first two.
The free value range. Send your approximate revenue, your industry, and an email address. Within two business days you have a CPA-prepared working range against the sources above and the two or three items a buyer's accountant would raise first. It is a starting point, not an appraisal, and it is confidential. Get the value range.
The Exit-Readiness Review. $4,500 flat, two weeks. We come to the business, rebuild SDE from the add-backs up, score the company on the five things buyers examine, and give you a defended value range you could put in front of a buyer, a readiness scorecard, and a 90-day fix list. The fee is credited against our success fee if we later sell the business. What the Review covers.
A formal appraisal. For estate planning, a divorce, a partner buyout, or a tax filing, you may need a certified valuation from a credentialed appraiser, prepared to a standard a court or the IRS will accept. That is a different product from a sale price, and we will tell you when you need one instead of us. We do not give legal or tax advice, and your CPA and attorney stay yours.
Selling a business in Chicago Multiples by industry Owner FAQ
The valuation questions owners ask most.
How much is a business worth that makes $300,000 a year?
If the $300,000 is SDE, a typical main-street business sells for roughly $600,000 to $900,000, or 2.0 to 3.0 times SDE. Contracted revenue and a manager who runs the day to day push toward the top of that range; owner-held relationships and cash-basis books push toward the bottom. If the $300,000 is revenue, the business is worth a multiple of whatever it keeps, not of sales.
How much is a business worth with $1,000,000 in sales?
It depends on what it keeps. A business with $1 million in sales and $150,000 to $200,000 of SDE is typically worth $300,000 to $600,000. One that keeps $300,000 is worth more than one that keeps $100,000, on the same sales. Buyers and lenders price the earnings, then check that the price can be financed out of them.
Is a business worth five times profit?
Rarely, for an owner-operated company. Five times earnings shows up when EBITDA is several million dollars, revenue is contracted, and a management team runs the business without the owner. Market Pulse reported 5.8x EBITDA for the $5 million to $50 million band in Q2 2026. Most businesses under $2 million in value sell for 1.6 to 3.6 times SDE.
Is a business valued on revenue or profit?
Profit, rebuilt the way a buyer reads it. Revenue multiples are used as a shortcut in a few fields, such as small accounting practices, but for manufacturing, distribution, the trades, logistics and most services, the price is a multiple of SDE or EBITDA after add-backs are documented and owner pay is set to market.
Do I need a formal business valuation to sell?
No. A sale price comes from normalized earnings, the multiples buyers are paying, and what a lender will finance, and that is what a pricing memo establishes. You need a certified appraisal for estate, divorce, partner-buyout or tax purposes, which is a different product. If you need one, we say so rather than sell you the wrong thing.
Does a Chicago business sell for more or less than the national numbers?
A little less, on the only closed-sale data published for the metro. BizBuySell's Chicago-Naperville-Joliet sales for 2024 averaged 2.43 times cash flow and 0.63 times revenue, against a national average of 2.61 times cash flow and 0.69 times revenue for 2025. Chicago's higher wage and rent base compresses margins, which lowers the earnings number more than the multiple. Buyer demand in Cook, DuPage, Kane, Lake, McHenry and Will counties is deep for prepared businesses in the trades, manufacturing and distribution.
What is the average multiple for a small business sold in Chicago?
2.43 times cash flow and 0.63 times revenue, on the 179 Chicago-metro sales BizBuySell reported for 2024, at a median price of $307,482 and 92 cents on the asking dollar. Listings in the third quarter of 2025 were asking 3.26 times cash flow, which is the gap between asking and closing. Larger companies, $1 million to $15 million in revenue, are priced in higher bands: about 2.8 to 3.0 times SDE for an owner-run business and 4 times EBITDA or more for a managed one.
Can I estimate what my business is worth myself?
Yes, to a range. Take pre-tax profit, add back one owner's salary and benefits, interest, depreciation and documented one-time expenses; that is SDE. Multiply it by 2.0 to 3.0 for an owner-run company, or 3.7 to 4.5 times EBITDA once a management team runs it. A business with $300,000 of SDE lands at $600,000 to $900,000 before a buyer's adjustments.
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