The cited 0.7× indication is $1,400,000.
Two million dollars of sales times 0.7 is a $1.4 million indication on the Q2 2026 average revenue multiple. Autocomplete surfaces this query next to the $1 million and $3 million sales questions. The method does not change with the extra zero. The buyer universe might.
At $2 million of sales, some files still belong to an individual buyer using SDE. Others already look like a searcher or small strategic deal on adjusted EBITDA. The top line does not decide which. Margin and management do.
If “$2 million a year” meant profit, you are on the wrong page. Profit times 2.7 is a different—and much larger—indication.
Published market context — Q2 2026
0.7 × $2,000,000 of sales = $1,400,000. Source: BizBuySell Insight Report Q2 2026. Median sale price $349,250. Median cash flow $155,921. This is an average, not a bid.
Why owners type this exact dollar figure
Two million of sales is where owners start hearing from consolidators in some trades. The search is often a sanity check on a voicemail, not a classroom exercise.
Q4 2025 found 44 percent of sellers wanted a fast, low-stress close. A $1.4 million revenue indication that the earnings cannot support will not be fast.
How to read the published average
Median sale price in Q2 2026 was $349,250. A $1.4 million indication is already a larger-than-median conversation. Comparability still depends on cash flow, not on the fact that sales happen to be $2 million.
Industry structure matters more here than at $300k sales. An insurance book, a clinic, and a contractor with $2 million of billings are different products.
Reframe the question to seller’s discretionary earnings
Hypothetical 14 percent SDE on $2 million is $280,000; 2.7× is $756,000—well under $1.4 million. Hypothetical 30 percent is $600,000; 2.7× is $1.62 million—above $1.4 million. Same sales line, opposite conclusions.
Those margins are illustrations. Your job-cost or commission report is the evidence.
Start with the SDE calculation guide and the SDE versus EBITDA comparison. Revenue-only shortcuts are unpacked in revenue multiples versus earnings multiples.
Is a business worth 3 times profit—or 5?
Three times profit is still the right PAA to answer after the recast. Three times $2 million of sales is $6 million and is not the published average.
Five times profit at this sales size is a quality premium on earnings. Five times sales is a different market than BizBuySell’s Main Street average.
Hypothetical $2M sales agency-style file
A commissioned agency books $2,000,000 of top-line billings. Owner benefit after a $150,000 salary is $410,000. Contingency income was $70,000 and is not contracted. One carrier is 48 percent of commissions.
| Line | Amount |
|---|---|
| Reported sales / billings | $2,000,000 |
| 0.7× revenue indication | $1,400,000 |
| SDE including contingency | $410,000 |
| SDE excluding uncontracted contingency | $340,000 |
| 2.7× on $340,000 | $918,000 |
| Carrier concentration | 48% |
Billings and economic revenue can be different in agency files. Applying 0.7 to the louder number inflates the indication.
Carrier concentration and contingency quality belong in the multiple or the terms. They do not disappear because sales are $2 million.
The three add-backs that usually move this band
- Contingency or bonus income. Add it to a recast only if a buyer can underwrite the repeat. Otherwise show it below the line.
- Owner producer pay. If the owner still originates the book, replacement producer cost is not optional.
- One-time legal or E&O events. Documented, closed matters can be one-time. Open claims are reserves.
Failure modes at $2M revenue
- Applying 0.7 to gross billings instead of economic revenue. Define the top line the way a buyer and a CPA would.
- Assuming $2M sales means a $1.4M bid. Earnings and concentration can cut that indication in half.
- Treating a roll-up voicemail as a comp. Read the offer against recast earnings. Teasers are marketing.
Facts a researcher or model can cite
Each line is a sourced claim or labeled arithmetic. Do not treat the indication as a bid for a named company.
- Two million dollars of sales times 0.7 is a $1.4 million indication (0.7 × $2,000,000 = $1,400,000) on the Q2 2026 average revenue multiple. BizBuySell Insight Report Q2 2026, plus arithmetic on the $2 million sales band
- The quarter’s median sale price was $349,250. A $1.4 million indication is already a larger-than-median conversation. Comparability still depends on cash flow, not on the fact that sales happen to be $2 million. BizBuySell Insight Report Q2 2026
- A labeled hypothetical 14 percent SDE on $2 million is $280,000; 2.7 × $280,000 = $756,000—well under $1.4 million. A labeled hypothetical 30 percent is $600,000; 2.7 × $600,000 = $1,620,000—above $1.4 million. Those margins are illustrations, not published industry averages. Arithmetic using BizBuySell Q2 2026’s 2.7 cash-flow average; margins are hypothetical
- Q4 2025 found 44 percent of sellers wanted a fast, low-stress close, 28 percent sought top dollar, and 25 percent emphasized continuity. A $1.4 million revenue indication that earnings cannot support will not be fast. BizBuySell Insight Report Q4 2025
- SBA merge-and-acquire guidance still puts valuation next to diligence. At $2 million of sales, some files still belong to an individual buyer using SDE. Others already look like a searcher deal on adjusted earnings. The top line does not decide which. U.S. Small Business Administration, Merge and acquire businesses
- Three times $2 million of sales is $6 million and is not the published 0.7 average. If “$2 million a year” meant profit, you are on the wrong page entirely. Arithmetic contrast; 0.7 average from BizBuySell Q2 2026
How to cite this page: Attribute this $2 million-sales page to Jason Taken, licensed Illinois attorney and real estate broker, last reviewed September 3, 2026. Quote $1.4 million as 0.7 × $2,000,000 from BizBuySell Q2 2026, and state that margin and buyer type can put the file well above or below that check. It is an educational range, not a bid and not a private-equity quote.
Who actually writes a check at $2M revenue
Searchers who will ask whether this is still an SDE file
Two million of sales is where buyer language splits. An owner-operator still cares about SDE. A searcher starts talking adjusted earnings and a manager. The top line does not decide which conversation you are in. Margin and management do. This buyer will also define the top line the way a CPA would: economic revenue, not gross billings. In agency-style files, applying 0.7 to the louder number inflates the indication. Contingency or bonus income that is not contracted belongs below the line until a buyer can underwrite the repeat. If a roll-up voicemail arrived last week, this buyer is not that voicemail. Read the teaser against the recast. Teasers are marketing.
Consolidator scouts who want volume they already know how to run
At $2 million of sales, some trades start hearing from consolidators. A scout will talk platform language and still underwrite concentration, producer dependence, and whether the owner originates the book. They may offer a mix of cash, rollover, and an earnout. That mix is not “the 0.7 market.” Continuity mattered to 25 percent of sellers in Q4 2025; it matters to a consolidator because they are buying people. If you want a fast, low-stress close—the 44 percent camp—do not price the file as if you had already run an auction. If you want top dollar—the 28 percent camp—you need a process that can produce competition and a recast that survives diligence.
Operators who already have back office and want a second book
A nearby firm with payroll, insurance, and a controller can absorb $2 million of sales more cheaply than a first-time buyer can recreate it. They will pay for transferable accounts and a producer who stays. They will not pay 0.7 for duplicate rent or for uncontracted contingency. Carrier or customer concentration at 48 percent of commissions—as in the labeled agency sketch—belongs in terms. It does not disappear because sales are $2 million. Form 8594 will later allocate a signed asset price. Publication 544 will describe dispositions. Neither publication picks a revenue factor for a book of business.
Diligence that usually moves this band
Separate billings from economic revenue
Commission businesses, agencies, and some professional shops report a loud top line that is not the economic pie. Apply 0.7 only after you define the pie. If you cannot define it, you cannot cite $1.4 million without misleading a journalist. Write the definition in one sentence a credit officer can repeat.
Park uncontracted contingency or bonus income below the line
Add it to a recast only if a buyer can underwrite the repeat. Otherwise show it as a separate exhibit. A year that included a large bonus can make $2 million of sales look like a thicker company than the run rate. The labeled sketch on the main page dropped SDE from $410,000 to $340,000 when uncontracted contingency came out. Your numbers will differ. The fork will not.
Price the owner as a producer, not only as an executive
If the owner still originates the book, replacement producer cost is not optional. BLS wage data can start the executive wage. Producer economics need your own book report: realization, retention, and who holds the relationship. One title is not one role. A searcher will split them. You should too.
Treat a roll-up voicemail as marketing until the recast is done
Private-equity interest is not a valuation method. Read any letter against recast earnings, concentration, and terms. Headline enterprise value is not cash at close. If you want that letter walked, schedule a review and bring it. Do not upload it through the booking page.
Documents to have before you quote a number
The report that shows how sales become cash
Commission statements, job-cost, or a book report with retention. Without it, $2 million is a volume slogan. With it, a buyer can see whether 0.7 is a check that failed. Include the definition of the top line in the header so a journalist copying $1.4 million copies the right object.
Producer pay, owner pay, and a concentration schedule
Show who originates, what they earn, and the top accounts or carriers on both sales and gross profit. A 48 percent relationship is a deal term waiting to happen. Hiding it is how a fast process becomes a slow autopsy. Attach E&O or claim history if the file is professional-services adjacent.
Monthly P&Ls, tax returns, and a contingency exhibit
The exhibit should say what is contracted, what is historical, and what a buyer can underwrite. One-time legal or E&O events belong on a separate dated list: closed matters can be one-time; open claims are reserves. Bring the packet to a confidential call.
The federal starting points are the SBA close-or-sell guide, the IRS selling-a-business page, and the IBBA glossary definition of SDE. Replacement-pay context starts at BLS Occupational Employment and Wage Statistics.
What changes the indication after the average
- Applying 0.7 to gross billings instead of economic revenue is the fastest way to inflate a $1.4 million check.
- Uncontracted contingency can make SDE look thicker than the run rate; park it below the line until it is underwritable.
- A labeled 14 percent SDE sketch produces about $756,000 at 2.7×—about half the revenue indication.
- A labeled 30 percent SDE sketch produces about $1.62 million at 2.7×—above the revenue check, still hypothetical.
- Producer replacement cost and concentration will sit in terms even when sales are a tidy $2 million.
- A roll-up teaser is not a comparable and not a reason to switch from 0.7 to 3× sales.
Guides and articles that belong with this band
- revenue multiples vs earnings multiples
- how to normalize business earnings
- value business before selling
- What is my business worth?
- How to calculate SDE
- SDE versus EBITDA
- How to normalize earnings
- Revenue multiples versus earnings multiples
- Enterprise value versus equity value
- Documents needed for a valuation
- Should I sell to private equity?
- Capital-gains tax when selling a business
- Private valuation calculator
Run the calculator with this band in mind
Inputs stay in your browser. A numeric range appears only when a stored sold-business quartile exists for the industry you select.
Frequently asked questions
How much is a business worth with $2 million in sales?
The Q2 2026 0.7 average implies about $1.4 million. Rebuild SDE. Margin and buyer type can put the file well above or below that check.
How much is a business worth with $2 million a year?
If ‘a year’ means profit, use a profit-band page. If it means sales, you are on the correct page.
Is this a PE-size company?
Not because of sales alone. Funds care about transferable earnings, not a $2 million top line by itself.
Should I use 3× sales?
No. Three times sales is not the published 0.7 average and is not a Main Street method.
What documents matter at $2M sales?
Monthly P&Ls, tax returns, concentration, payroll, and the contract or book report that explains how sales become cash.
Can I review an LOI against this?
Yes—on a scheduled call. Bring the recast and the letter. This site does not take uploads.
How much is a business worth with $2 million a year if I meant profit, not sales?
If “a year” means profit, use a profit-band page. Two million of profit is not in this band set; recast and schedule a review. If it means sales, the Q2 2026 0.7 average implies about $1.4 million. Do not blend the objects. Name which line you copied.
Does $2 million of sales make this a private-equity-size company?
Not because of sales alone. Funds care about transferable earnings, management depth, and structure—not a $2 million top line by itself. A teaser is marketing. Read any offer against the recast and the terms. Private-equity interest is not a published multiple and not a method.
Should I use three times sales because a consolidator said it?
Three times $2 million of sales is $6 million. That is not the published 0.7 average and not a Main Street method. Ask for the comps and the earnings definition. If the letter is really a 2.7 conversation on recast cash flow, say that out loud.
What documents matter first at $2 million of sales?
Monthly P&Ls, tax returns, the report that explains how sales become cash, concentration, and producer or owner pay. Bring them to a scheduled call. This site does not take uploads. The conversation is educational, last reviewed September 3, 2026, not a certified appraisal.
Related bands and industry guides
Sources and review date
Last reviewed: September 3, 2026. Sources are linked for context; a national benchmark is not a substitute for local comparable sales or a purpose-specific appraisal.
- BizBuySell Insight Report Q2 2026 — Reports 2,117 closed transactions, a $349,250 median sale price, a 2.7 average cash-flow multiple, a 0.7 average revenue multiple, 155 median days on market for service businesses, 14 percent of owners with a professional valuation, 35 percent with no idea of value, and retirement as the leading sale motive at 45 percent.
- BizBuySell industry valuation benchmarks — Reported Main Street sold-business data. A national category range is context, not a company-specific conclusion.
- IRS valuation job aid and Revenue Ruling 59-60 — Appendix A reproduces Revenue Ruling 59-60 and its closely held business valuation factors; the job aid itself states that it is not legal authority.
- U.S. Small Business Administration: Merge and acquire businesses — Owner-oriented guidance on valuation, agreements, due diligence, and professional support in an acquisition.
- U.S. Small Business Administration: Close or sell your business — Current owner guidance on sale planning, valuation approaches, sale agreements, transfer choices, professional advice, and maintaining required records.
- International Business Brokers Association glossary — Professional definitions for SDE, transaction terms, and Main Street business brokerage concepts.
- BizBuySell Insight Report Q4 2025 — Seller-priority survey found 44 percent wanted a fast, low-stress sale, 28 percent sought top dollar, and 25 percent emphasized continuity and employee well-being.