Valuing a Business Services business
Business services —consulting, outsourcing, maintenance, advisory— are valued above all on the recurrence of their revenue and on how little they depend on the specific people delivering the service. A contract that renews itself is worth far more than a project you have to win all over again.
Business Services sector EBITDA multiples
| Low | Typical | High | |
|---|---|---|---|
| EBITDA multiple | 4,0x | 5,8x | 8,0x |
Source: Dealsuite Southern European M&A Monitor H1-2025 · Period: H1 2025
Worked example
A business in this sector with EBITDA of €600,000 would have an indicative valuation between €2,400,000 and €4,800,000, applying the sector multiple range.
Example EBITDA
€600,000
Indicative valuation
€2,400,000 – €4,800,000
Illustrative calculation based on sector multiples. The real valuation depends on many other factors specific to your company.
What drives the value of a Business Services business
The key question in business services is: does the revenue repeat on its own, or do you have to win it back every year? A company with recurring contracts, high client retention and a service that does not depend on a handful of irreplaceable people sits at the top of the range. The buyer discounts founder dependence (common in consulting), client churn and concentration in a few accounts. A trained team, documented processes and multi-year contracts are what turn a people business into a transferable, well-valued asset.
What raises and lowers the multiple
Raise the valuation
- Recurring contracts and high client retention
- A service that does not depend on irreplaceable people
- A diversified, multi-year client base
- Documented processes and a trained team
Lower the valuation
- Revenue from one-off projects with no recurrence
- Strong dependence on the founder or on key figures
- Concentration in a few large accounts
- High client or staff turnover
Frequently asked questions
- What makes a services company well valued?
- Recurrence. A business with contracts that renew themselves and clients who stay year after year offers predictable revenue, and predictability is what raises the multiple the most compared with a model that depends on winning every project.
- Why does founder dependence penalise so heavily?
- Because in services the asset is the people. If clients are tied to the founder and would leave with them, the buyer takes on a high risk: they either discount it from the price or make it conditional on the founder staying tied to the company through an earn-out.
- How do I turn my consultancy into a more sellable asset?
- By documenting processes, building a team that delivers the service without you and signing multi-year contracts. The less the business depends on specific people and the more recurring its revenue, the higher the valuation.
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