Which business model sells for the highest multiple? Ranked from 900+ listings

The short answer

Most pages on this question list multiples by industry. This one is by model. For industries, see small business multiples by industry, SaaS valuation multiples and profit multiples by SaaS category. For the full map of models, start with types of business models.

On Reddit the thread that ranks first for this question is a founder asking what multiple to accept. The top reply is the honest one.

“Totally depends on business, industry, and many internal factors (I.e. are most your profits from one or two clients? Is your business recession proof?)”comment in an r/fatFIRE thread on accepting a multiple

Another commenter described a strategic buyer paying “4-6X upfront and 8-15X with milestone earnouts.” Those anecdotes come from larger companies. Below, we measure the small end, where most founders sell, and show the model effect separately from size and industry.

Business models ranked by median asking profit multiple

We took every acquire.com listing in the BigIdeasDB SellSide dataset that carries an AI-assigned business model tag, then computed the median asking price divided by trailing twelve month profit for each model. Hybrid (16 listings), ecommerce (7), content (1) and the catch-all “other” (57) are left out of the ranking because the samples are too small or the label is not a model.

The spread on profit multiples is narrow: 3.0x to 4.15x. Buyers pay roughly 3 to 4 years of profit for any of these models. Usage-based leads, but with 37 listings the lead over subscription (3.8x) is inside the noise. Read the top of the table as “usage-based and subscription, both near 4x” rather than a clear winner. Services sit at the bottom at 3.0x, which fits the labor-heavy business behind them.

Ranked by median asking revenue multiple

Rank the same listings by price divided by revenue and the order changes, and the spread widens from 3.0x to 4.15x down to 1.0x to 2.4x.

Subscription wins on revenue (2.4x), usage-based follows (2.2x), and one-time and marketplace tie at the bottom (1.0x). The table above already hints at why: the revenue ranking is the margin ranking.

Why revenue multiples spread more than profit multiples

A revenue multiple is a profit multiple multiplied by the profit margin. Buyers anchor on profit, so models with similar profit multiples but different margins land far apart on revenue. Multiply each model’s median profit multiple by its median margin and you get close to the observed revenue multiple.

One-time purchase and subscription listings both ask 3.8x profit. One-time asks 1.0x revenue because its margin is 27.4%. Subscription asks 2.4x because its margin is 68.6%. Same profit multiple, 2.4 times the revenue multiple. If someone tells you their business is worth “2x revenue,” ask for the margin first. A 2x revenue multiple on a 28% margin is a 7x profit multiple, far above what these models ask.

Why do recurring revenue businesses sell for more?

Two things are mixed together, and our data separates them only partly. The first is margin: recurring software has little cost of goods, so each revenue dollar leaves more profit. That is the bigger effect in the tables above. The second is predictability: a buyer paying 3.8x profit prefers profit that renews next month. In our data, subscription’s profit multiple (3.8x) equals one-time purchase’s (3.8x) and sits below usage-based (4.15x). So we do not see a large per-dollar-of-profit premium for recurrence. We see a large per-dollar-of-revenue premium that margin explains.

Recurring revenue does carry a size effect. Subscription listings are smaller (median $105,000 TTM revenue) than one-time ($388,000) or services ($339,000), yet they ask the same or a higher profit multiple. Small and recurring still gets 3.8x. For how profit and revenue multiples change by SaaS category, see profit multiples by SaaS category.

1. Usage-based: the highest profit multiple, on a thin sample

Usage-based listings (37) ask a median 4.15x profit and 2.2x revenue with a 56.3% margin and $246,000 median revenue. They are bigger than subscription listings and the margin is lower, because usage costs (compute, API calls, messages) scale with revenue. The premium is a signal that buyers like revenue that grows with the customer’s own usage. The caution is the same cost: margins move with the vendor’s bills. Read usage-based pricing vs subscription for when each wins.

2. Subscription: the best revenue multiple, and the only big sample

Subscription listings (580, 64% of the tagged set) ask a median 3.8x profit and 2.4x revenue on a 68.6% margin. This is the model behind most small software sales. The median listing earns $105,000 in trailing twelve month revenue. If you want the broad ranking of models by margin rather than multiple, see most profitable business models.

3. One-time purchase: a 3.8x profit multiple on a 1.0x revenue multiple

One-time listings (41) ask 3.8x profit, tied with subscription, on the largest median revenue of any model ($388,000) and a 27.4% margin. Buyers pay the same number of profit years, but there are fewer profit dollars per revenue dollar, so revenue multiples collapse to 1.0x. These businesses also have to win every sale again, which our asking data cannot price directly.

4. Marketplace: 3.4x profit, 1.0x revenue

Marketplace listings (45) ask a median 3.4x profit and 1.0x revenue on a 28.3% margin, which is low because many of these businesses report gross transaction volume as revenue. A marketplace that reports only its take rate would show a higher margin and a different revenue multiple. See the marketplace business model for how take rates change the picture.

5. Services: the lowest profit multiple at 3.0x

Services listings (123) ask a median 3.0x profit and 1.25x revenue on a 43.8% margin and $339,000 median revenue. Buyers pay the least per dollar of profit because the profit depends on people. That is a model fact, not a failure: a services business at 43.8% margin is more profitable than most offline businesses, and it is the easiest of the five to start.

Do offline businesses follow the same rule?

We ran the same question on the Main Street Index: US businesses for sale on listing sites, de-duplicated, with asking price and SDE both disclosed (27,439 listings). SDE is seller’s discretionary earnings, profit plus the owner’s pay, so these multiples are lower than a software profit multiple and cannot be compared one for one. Each listing carries one or more AI-tagged revenue models, so the groups overlap. We show groups with 500+ listings.

Offline, the recurring premium is small to absent. Businesses tagged with recurring contracts (3,085) ask 2.51x SDE, below the 2.62x overall median. Subscription or membership businesses (811) ask 2.85x, the top of the six, and route-based businesses ask the lowest at 2.30x. Spread across all six groups is 2.30x to 2.85x, tight compared with software.

Franchise resales (2,545) ask 2.87x despite the lowest margin of any group (18.0%), because buyers pay for a brand and a system. Route-based listings (1,417 flagged) ask 2.29x. Part of a route’s low multiple is that buying one is partly buying a job, since SDE includes the owner’s own pay. Software buyers pay for margin and scale. Main Street buyers pay for owner-independent cash flow, so the model label matters less than size, industry and how much the owner does. For that, see small business multiples by industry and the Business Price Checker.

How much is a business worth with $1,000,000 in sales?

Start with profit, then apply the model’s multiple. The same $1,000,000 in sales gives very different asking prices.

• Subscription, 68.6% margin: about $686,000 profit, and at 3.8x profit an ask near $2.6 million (2.4x revenue is $2.4 million).
• Services, 43.8% margin: about $438,000 profit, 3.0x gives about $1.3 million.
• Marketplace or one-time, 27% to 28% margin: about $275,000 profit, 3.4x to 3.8x gives about $0.95 million to $1.05 million.
• Offline, 24% SDE margin: about $240,000 SDE, and at 2.62x an ask near $630,000.

These are medians for listed businesses, so treat them as the middle of what sellers ask. Your offer depends on customer concentration, owner dependence and growth. Check a specific asking price with the Business Price Checker.

What to do with this

1. If you plan to sell software later, build recurring or usage-linked revenue. Both ask close to 4x profit, and subscription’s 68.6% margin supports the best revenue multiple.
2. Value on profit first. Convert any revenue multiple you hear into a profit multiple with the margin before you compare.
3. Buying offline? Do not pay extra for the word “recurring.” Check contract length, churn and owner hours instead. Compare against the industry median.
4. Picking a model to start? Compare margins as well as multiples in most profitable business models and the full list of models.

To see live listings in the niche you are weighing, scan subscription software listings or scan the usage-based niche before you build.

What this cannot tell you

• Asking, not closing. Multiples here are listed prices. Closed deals often land lower, and we have no sold data.
• Small samples. Usage-based has 37 listings, marketplace 45, one-time 41. Hybrid (16) is not ranked. Subscription (580) is the only strong sample.
• One marketplace. acquire.com skews to small software and startups with a median revenue near $100,000 to $400,000. Larger deals price differently.
• AI-assigned tags. A listing’s model is classified from its text. Some hybrids are filed as one model.
• Medians multiply loosely. The margin bridge multiplies two medians from the same listings, so it approximates the revenue multiple.
• SDE is not profit. Offline multiples include the owner’s pay in earnings and cannot be compared with software profit multiples.

Methodology and sources

Keep reading: more business models, with the data

• The SaaS business model: how SaaS makes money, measured on 5,700+ revenue-verified startups.
• Is SaaS profitable: an 85% median margin, but a $140 median MRR.
• The micro SaaS business model: the top 6% of earners hold 82% of all MRR.
• The AI wrapper business model: 1,350+ earning AI startups, and why margins run 10 points lower.
• The vertical SaaS business model: 24 industries with many operators and thin software.
• The productized service business model: the bridge from agency to software, with 10 offers ranked by demand.
• The agency business model: six agency models, and why insurance agencies keep 53.8%.

Frequently asked questions