Sometimes sellers hear that a business in their industry got a certain multiple, so they want the same number. But multiples depend on several factors, especially the size of the business being sold.
For Main Street deals, multiple are typically based on SDE without working capital (approximately 2.5-3.5x SDE in 2016).
In the lower middle market, EBITDA including working capital (4-7x EBITDA in 2016) is the most common multiple type.
As always, there are outliers above and below these trends. Sellers who prepare and plan ahead typically end up on the higher side of multiple trends.