I’ve never built a $100 million business. But I’ve talked to people who have, and the math they use is worth understanding — especially if you’re thinking about building something worth more than just your annual take-home.

How Service Businesses Get Valued

If you’re running an accounting firm or any service business, the way it typically gets valued is as a multiple of EBITDA. That’s basically the profit your business has left over at the end of the year after operating expenses.

So if your firm is making $1 million a year in profit, you might get a 2 to 3x multiple on that. The value of your business would be somewhere around $2 to $3 million.

Solid. But here’s where it gets interesting.

The Multiple Grows With You

As the business gets larger, the multiple itself increases. A firm making $1 million in profit might get a 2-3x multiple. But a firm doing $10 million a year in profit? That multiple jumps to 8-10x. Which means a business with $10 million in annual profit could be worth $80 to $100 million.

That’s the play the big operators use. You get to a certain scale and your multiple starts to increase exponentially.

Why This Matters for You Right Now

Think about what this means practically. If you double your profit, you might not just double the value of your business. You could triple or quadruple it — because you’re not only increasing the base number, you’re also moving into a higher multiple bracket.

This is why building real enterprise value matters. It’s not just about what you take home this year. It’s about what the whole thing is worth when you’re ready to step back, bring in a partner, or sell.

Your profit isn’t the only thing that grows as you scale. The multiplier on that profit grows too. And that’s where the real wealth gets built.

Frequently Asked Questions

How are accounting firms valued for sale?

Most service businesses including accounting firms are valued as a multiple of EBITDA — your annual profit after operating expenses. At $1M in profit you might get a 2-3x multiple, but at $10M in profit the multiple jumps to 8-10x. The bigger you get, the more each dollar of profit is worth.

What is an EBITDA multiple for a service business?

It is the number your annual profit gets multiplied by to determine the value of your business. For smaller firms it is typically 2-3x. As the business scales, that multiple increases — meaning your business value grows faster than your profit does.

How do I increase the value of my accounting firm?

Focus on growing profit, because doubling your profit does not just double your business value — it can triple or quadruple it. As you scale into higher profit brackets, the EBITDA multiple itself increases, creating a compounding effect on your total valuation.

Should I build my accounting firm to sell it?

Whether you plan to sell or not, building enterprise value gives you options — bring in a partner, step back from day-to-day work, or sell outright. The firms that scale intentionally end up with a real asset, not just a job that pays well.