# What is valuation multiple?

Source: https://launch-rec.com/glossary/valuation-multiple. Category: Ownership. Market: US and UK.

## Definition

The figure applied to profit to value a recruitment business — typically 4x to 7x EBIT, higher for contract-heavy, recurring books.

## In practice

Contract-heavy agencies with sticky clients and high redeployment trade at the top of the range. Perm-only books with founder-dependent billing trade at the bottom.

Client concentration is the biggest single discount. One client above a third of gross profit will move a multiple before any growth story does.

## Related terms

- https://launch-rec.com/glossary/earn-out
- https://launch-rec.com/glossary/equity-stake
- https://launch-rec.com/glossary/gross-margin