The Buying Process

Valuing a Small Business: Profit Multiples Explained

By Raphael Ramani, Acquisition Finance Specialist · Last reviewed 16 October 2026 · 7 min read

Most main-street businesses sell for a multiple of maintainable profit. Here is what that means — and what moves the number.

Start with maintainable profit

Valuation begins with what the business reliably earns after every cost — including a market wage for the work the owner does. Sellers' add-backs are scrutinised hard: a genuine one-off repair counts, a spouse's unpaid bookkeeping does not.

Multiples by sector

Indicative ranges for established, verifiable businesses:

—Cafés and takeaways — typically 2 to 3 times maintainable profit
—Restaurants — 2 to 3.5 times, higher with property or exceptional sites
—Convenience stores — 2.5 to 4 times, plus stock at valuation
—Freehold property — valued separately and added to the business price

What moves the multiple

A long lease, growing takings, systems that run without the owner and a second income channel all push a multiple upward. Declining sales, a short lease, or a business that is the owner, push it down. The multiple is not fixed — it is negotiated with evidence.

Location is one of the most significant factors in the multiple a business commands. Businesses in well-populated areas with limited competition typically sell at higher multiples than equivalent businesses in smaller towns. A convenience store generating the same profit in a city centre and in a rural market town will attract meaningfully different valuations.

For a sector-specific view of how this works in practice, see our page on Off Licences acquisition finance and loans, including how lenders assess these deals and the areas we cover.

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