Can anyone tell me where I would find accurate information on the earnings multiple number to use for my business?

If you want to find it yourself, Pratt's Stats would be the place to start. But more than likely you want to talk to a valuation expert that's done hundreds of them. I've done that for hundreds of agencies, but never for your tyoe of firm.

If your firm is small, you must normalize your compensation so that you aren't subsidizing the net. Regardless of size, you'll have to account for any client concentration issues.

Further to David C. Baker's answer, there are databases of business sales with reference to selling price as a percentage of sale and as a multiple of EBITDA and Seller's Discretionary Earnings. (SDE=EBITDA+an owner/manager salary)

With small companies that generate a profit under $500K of EBITDA, it is critical to properly normalize the cash flow, the company can then be compared to other similar companies that have been sold.

I have dealt with several companies in the IT/SaaS space and what I've learned is that they aren't in touch with the reality of selling small business cash flows. Typically a service company with little in capital assets is going to sell for between 1.5 and 2.8 times discretionary cash flow.

What most IT entrepreneurs are looking for is the lofty acquisition multiples that make the headlines. The reality of selling a small business is that a buyer needs to be able to make a living, get a return on his investment and service his debt based on the cash flow that already exists.

Put yourself in the potential buyer's shoes and see what you could afford to pay and still achieve those requirements.

In order to accurately determine an earnings multiple you either need to find relevant precedents (recent, similar size, niche etc.) or speak to a broker who does this on a daily basis and has access to real sales data assuming you are looking to sell outright.

Here’s a useful article on the topic: http://feinternational.com/blog/how-do-you-value-an-online-business/

Please elaborate more on what do you mean by "Earnings Multiple Number"?

There are several accepted ways to put together a valuation of a business. I'm personally familiar with 5 methods.

In my experience I find that most sellers choose the method that generates the highest sale price and most buyers choose the method that generates the lowest one. So there's no such thing as "accurate".

The bottom line will come down to what price / payment arrangement you are willing to accept for the business and what and how a buyer agrees to pay.

If you are in the market to sell your business right now I'd strongly suggest you find a business broker who has experience brokering deals in your specific business sector and preferably also in your geographic region. They can help you properly price your business and make sure you get what you want and need in the sale.

Best of luck!