Free Business Tool

Business Valuation Estimator

Get a ballpark number for what your business is worth using three standard methods.

Instant Results

No Data Stored

100% Free

What Is the Business Valuation Estimator?

Every business owner should know roughly what their company is worth, but most have no idea. This calculator runs three standard valuation methods side by side: revenue multiple (your annual revenue times an industry multiplier), earnings multiple (your SDE or EBITDA times a profit multiplier), and asset-based value (what your tangible assets would sell for). The result is a weighted average that leans heaviest on earnings, because that is what a buyer actually pays for. You need this number when selling, bringing in a partner, applying for SBA loans, doing estate planning, or just figuring out whether your debt load makes sense relative to what you own. Small businesses under $5M revenue typically trade at 2-4x SDE. Larger companies valued on EBITDA pull higher multiples, often 3-6x or more.

How to Use This Estimator

Enter Annual Revenue

Put in your total gross revenue for the last 12 months. If your business is growing or shrinking, use trailing twelve months (TTM) rather than a fiscal year -- it is a more honest snapshot.

Enter Annual Profit

If you are under $1M revenue, use Seller Discretionary Earnings (SDE). Bigger than that, use EBITDA. SDE = net profit + owner salary + owner benefits + one-time expenses + depreciation.

Set the Industry Multiple

Look up your industry average. Restaurants run 1.5-2.5x. Professional services 2-4x. SaaS 3-10x. Manufacturing 2-4x. Retail 1.5-3x. Construction 1.5-3x.

Enter Total Assets

Add up equipment, inventory, real estate, vehicles, and other hard assets at fair market value -- not book value. Leave out goodwill and intangibles.

Key Concepts

SDE vs. EBITDA

SDE adds back the owner's salary and benefits to net profit. It is the standard for owner-operated businesses under $1M revenue. EBITDA strips out interest, taxes, depreciation, and amortization -- the standard for larger companies with hired management.

Industry Multiples

Multiples swing wildly depending on industry, growth rate, recurring revenue, and customer concentration. A SaaS company with 90% recurring revenue pulls 5-10x. A single-location restaurant might get 1.5-2x.

Goodwill

Goodwill is everything your business is worth beyond the hard assets -- brand reputation, customer relationships, proprietary processes, competitive advantages. In most small business sales, goodwill accounts for 50-80% of the purchase price.

Debt Impact on Value

Valuations are done on a debt-free basis. When you sell, the buyer subtracts your outstanding debt from the purchase price. So a business valued at $500K with $200K in debt puts $300K in your pocket -- not $500K.

Expert Insights

Revenue is not what drives valuation -- earnings quality is. A business making $100K from 50 long-term contracts is worth far more than one making $100K from a single client who could walk away tomorrow.

If you are running this to figure out whether your debt load is manageable, divide total debt by the earnings-based value. Above 50% means you owe more than half of what the business is worth. That is a dangerous spot that kills your options.

Never accept a formal valuation without digging into the assumptions. Valuators can produce wildly different numbers just by tweaking the multiple, changing add-back categories, or adjusting growth projections. Always demand the comparable transactions they used to justify the multiple.

Frequently Asked Questions

For most small businesses, earnings multiple wins because it reflects what a buyer will actually pay. Asset-based valuation gives you a floor -- the minimum. Revenue multiples matter most for high-growth companies that are not profitable yet.

Check BizBuySell median sale data, DealStats (formerly Pratt's Stats), ValuSource, or talk to business brokers in your industry. Multiples are published as ranges. Where you land in that range depends on your customer concentration, growth rate, and how dependent the business is on you personally.

Enterprise value is calculated without debt. But what you walk away with equals enterprise value minus whatever you owe. So $500K in value with $200K in debt means $300K in your pocket after close.

Pay for a formal valuation ($3,000-$15,000) when you are selling, buying out a partner, applying for SBA loans over $250K, doing estate planning, or going through a divorce. For general planning, this calculator gives you a solid directional number.

This estimator provides approximate valuations for planning purposes. Actual business value depends on detailed financial analysis, market conditions, buyer pool, and negotiation. Consult a certified business appraiser (CVA, ASA) for formal valuations used in transactions or legal proceedings.