A revenue multiple is the rough ratio buyers and investors use to estimate what a business could be worth: annual revenue multiplied by a range typical for that industry and stage.
The multiple varies widely by category. A services business with thin, labor-heavy margins and a SaaS company with recurring, high-margin revenue don't get valued the same way, even at identical revenue, since the multiple is really a stand-in for how durable and scalable that revenue actually is.
Applying one generic multiple to every business is how a rough estimate turns into a misleading one. The real number for a given company depends on what's actually being reported for its specific industry and stage at the time, not a single rule of thumb repeated across every type of business.
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