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