How are small businesses valued when buying or selling in Pakistan?

I want to buy a profitable retail or service business. Sellers quote high multiples of revenue. What valuation methods and EBITDA or SDE multiples are realistic for SMEs?

124 views

1 answer

0 me too

0 me too Reply

Top answer

Zubair Hadir 3 months ago

Serious buyers price normalized profit, not vanity revenue.

Common approaches
- Seller discretionary earnings (SDE) for owner-operated SMEs
- EBITDA for larger, more formal businesses
- Asset / inventory adjustment on top where relevant

Reality check
Many Pakistan SMEs trade closer to modest earnings multiples when books are messy, owner-dependent, or growth is flat. Clean accounts, recurring customers, and systems that run without the owner support a better multiple.

Never accept asking price until you normalize add-backs and verify tax filings match claimed profit.

Related: business valuation Pakistan, EBITDA multiple SME, sell business price

8 helpful Reply