A few minutes of read-only financials and a short questionnaire surfaces what a buyer would discount your software business for — how much of your revenue is genuinely recurring, your churn and net revenue retention, whether the product survives the founder leaving the codebase, and customer concentration — and why the 10–20x software multiples in the press don't apply to a profitable business your size. Preview costs nothing.
Enter two numbers for an instant Software & SaaS ballpark. No signup — the real number comes from your books.
We answer each one from your books first — so you fix the story before a diligence team writes the number.
In most small software businesses the founder wrote the code and still owns the roadmap. A buyer asks the brutal question: if you leave, who ships the next release and fixes the next outage? An undocumented codebase only one person understands is the single biggest discount on a software deal. Search-funders and SBA-backed individual buyers underwrite survival-without-you and haircut hard; a strategic with its own engineers can absorb it — but only by paying less for what it has to rebuild.
Recurring revenue is only worth a premium if it actually recurs. If logo churn runs hot (SMB self-serve is often 3–7% a month) or expansion doesn't outrun cancellations, your net revenue retention sits below 100% and the base is shrinking between sales. Buyers price recurring revenue on its durability — leaky retention pulls you toward a revenue-multiple floor (or onto an SDE basis entirely), and it's the first cohort report a buyer will demand.
If your largest account is more than ~15–20% of revenue, a buyer prices the risk it leaves and knows it can squeeze you on renewal. The same applies to acquisition: if nearly all signups come from one source — a single integration partner, one ad channel, one app-store placement — the buyer treats demand as fragile and discounts it.
A business whose existence depends on a single platform's rules — one app store, one API, one marketplace's traffic — carries a risk the buyer can't control: the platform changes terms, pricing, or cuts you off. Undifferentiated 'me-too' products with no switching cost get the same treatment. Buyers pay up for defensibility — sticky data, deep integrations, contractual lock-in — and discount its absence.
Each lever is sized for a typical profitable small saas, ~$1.5–2m arr, ~80% recurring, ~20% owner-normalized margin (priced primarily on sde / arr, not ebitda comps) — about $400K EBITDA. Same number whether we frame it as “what a buyer discounts” or “what you keep by fixing it.”
Retention is the highest-leverage number you own. Cutting logo churn and adding expansion revenue so net revenue retention clears 100% turns a flat base into a compounding one — and retention correlates strongly with the multiple buyers pay. This is the move that shifts you from a revenue-floor price toward the top of the band.
adds about 0.4–0.8× to your multiple · usually takes 12–24 months
Hire or promote so someone other than you ships product and someone other than you closes and renews customers, and document the architecture and deployment. Each role you make replaceable removes a discount; together they convert 'buying a job' into 'buying a business' a financial buyer can run without you.
adds about 0.5–1.0× to your multiple · usually takes 18–36 months
A buyer's first diligence ask is a clean subscription-revenue and cohort retention report. If your MRR, ARR, churn, and net revenue retention are reconstructible to the dollar and tie to your books, you protect the price you've earned from a mid-diligence re-trade. Messy or revenue-recognition-confused numbers get assumed-worst.
adds about 0.2–0.4× to your multiple · usually takes 1–3 months
Reduce your largest customer below about 15% of revenue and add a second and third real acquisition channel. Concentration in one account or one channel is a priced risk; spreading it both raises the floor under a bad quarter and removes a line item from the buyer's discount list.
adds about 0.2–0.5× to your multiple · usually takes 6–18 months
Typical impact ranges blended from lower-middle-market transaction data, sub-$50M M&A databases, and observed consolidator pricing in the $300K–$3M EBITDA band. Directional, not a guarantee — your memo computes your actual numbers from your books.
The metrics buyers grade software businesses on. The diagnostic fills the “your business” column from your actual QuickBooks data.
| Metric | Software & SaaS benchmark | Your business | What it means |
|---|---|---|---|
| Recurring / contracted revenue | ~80% of revenue | Your data | Higher is better — the top multiple lever |
| Gross margin | ~77% | Your data | Pricing and job-costing discipline |
| EBITDA margin | ~20% | Your data | What flows to the bottom line |
| Healthy customer-concentration ceiling | top customer under 15% | Your data | Above it, buyers price the risk |
| Typical industry growth | ~15% / yr | Your data | Beating it can add to your multiple |
| Typical sale multiple | 4.0–8.0× EBITDA | Your data | Where the bidding starts; the levers above move you up |
Benchmarks are blended industry composites, service businesses $1M–$10M revenue, 2026-Q1 — directional, not a precise bar. Your memo measures you against your own books. Connect QuickBooks to fill in your numbers →
The diagnostic arrives as formats you can actually use, plus a private, scoped link to share a curated package with a specific buyer — you decide, card by card, what they see.
A branded slide deck, ready to present — for the buyer meeting, the lender, or the board.
A written diagnostic that holds up with buyers, yours to edit — plain-English summary, how we rebuilt your real earnings, every add-back listed.
Live formulas, not a dead printout — the path from raw profit to your real number, plus the cash-tied-up scenarios a buyer can stress-test.
Small profitable software businesses sell into several pools, each structuring a deal differently. Individual buyers and searchers shop marketplaces like Acquire.com, usually with SBA-backed structures and earnouts/holdbacks tied to retention. SMB-SaaS holdcos — Tiny, SureSwift Capital — buy to operate forever, taking whole stakes and keeping the team, often part-cash, part-earnout. Constellation Software and its operating groups (e.g., Volaris) are the largest vertical-market-software acquirers, buying niche recurring-revenue players and holding permanently. Brokers like FE International and Quiet Light run the sell-side, pricing on SDE when small and shifting to revenue/EBITDA at scale. The memo maps which pool fits a business your size.
Read-only, through Intuit. We never write to your books. About 5 minutes.
Just what the books can’t show — agreements, key accounts, who runs the crews.
Buyer-readiness score, normalized EBITDA, value range and top flags — instantly.
The full engine, all three deliverables, the dashboard and the buyer deal room.
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Start with the free preview. Pay once — $499 — only when you want the full memo. No subscription, no per-seat pricing.
Most Software & SaaS businesses in the $1M–$10M revenue range trade at roughly 4.0× to 8.0× normalized EBITDA, with a typical deal near 6.0×. Smaller, owner-dependent shops sit at the low end; larger, manager-run businesses with recurring revenue reach the top. Your actual number depends on your books — that's what the diagnostic computes, blending recent lower-middle-market closings, main-street marketplace sales, and academic M&A survey data.
We start where a buyer of a small software business starts — not with the headline 'software' multiples in the press, but with your actual earnings. For most businesses under about $5M in value, that means Seller's Discretionary Earnings (SDE): your profit plus your owner's pay and personal/one-time items added back, each tied to a specific QuickBooks transaction. We apply a software-specific SDE multiple (roughly 3–5.5x, higher for sticky recurring SaaS) and cross-check it against your recurring revenue (about 3–5x ARR for a healthy small SaaS). What moves you within the range is software-specific: how much revenue is genuinely recurring, your churn and net revenue retention, whether the business runs without the founder in the code and the sales seat, and customer concentration. Every number traces back to your books.
Because those numbers come from a different universe. The public databases for 'software publishers' show median EBITDA multiples around 19x and the 75th percentile above 42x — but that pool is dominated by venture- and growth-funded companies and large strategic acquisitions, bought for growth and scale, not current cash flow. A profitable, owner-operated software business is not in that pool and will not sell there. Even the broad data confirms the gap: the elevated 'Information' sector private-company multiple tops out around 11x, while the all-sector private median is about 3.5x, and bigger deals always fetch more than small ones. The brokers who actually sell businesses your size — FE International, Quiet Light — price on SDE and ARR. We deliberately cap and disclose the EBITDA view so it can't over-value your business.
In order of leverage: durable recurring revenue with low churn and net revenue retention over 100%; a business that ships product and renews customers without the founder personally; clean, reconstructible MRR/ARR and cohort reporting; and a diversified customer base and acquisition channels with some real defensibility (switching costs, integrations, lock-in). The diagnostic scores where you sit on each and shows what moving up the range would be worth in dollars.
Sixty seconds. Four numbers. No signup, no email. Just a real answer.