About the Business Valuation Calculator
This business valuation calculator gives a quick, market-based estimate of what a small or mid-sized business might sell for. It applies three widely used multiples side by side — a multiple of seller’s discretionary earnings (SDE), a multiple of EBITDA, and a multiple of annual revenue — and blends them into a single estimate with a low-to-high range.
It is aimed at owners thinking about selling, buyers screening a listing, and advisers preparing for a conversation with a broker or lender. SDE multiples are most common for owner-operated businesses with under a few million dollars of earnings; EBITDA multiples are used for larger companies with a management team; revenue multiples are a rough cross-check, common for fast-growing or subscription businesses.
Multiples vary widely by industry, size, growth, customer concentration and how dependent the business is on the owner, so treat the defaults as placeholders and replace them with figures from comparable sales or a broker. Set any method’s multiple to 0 to leave it out of the blend. This is an estimate, not a formal appraisal.
With the default inputs, the estimated business value is $770,000.00. Change any value above to recalculate instantly.
How to use the business valuation calculator
- 1Enter annual revenue from your most recent full year (or trailing twelve months).
- 2Enter SDE and EBITDA — use the EBITDA calculator if you need to work them out.
- 3Set multiples from comparable sales, a broker or industry reports; use 0 to skip a method.
- 4Add any debt the sale must repay.
- 5Review the blended value and the range across methods.
Formula and method
The market approach values a business by comparing it with similar businesses that have sold. Each method multiplies an earnings or sales figure by the multiple buyers have paid for comparable companies: SDE × SDE multiple, EBITDA × EBITDA multiple and revenue × revenue multiple.
The blended estimate is a simple average of the methods you include (any method with a multiple of 0 is skipped), and the range spans the lowest to highest result. Proceeds after debt subtract loans that must be repaid at closing. The result is before broker fees, taxes and working-capital adjustments.
- SDE
- Seller’s discretionary earnings for one owner
- EBITDA
- Earnings before interest, taxes, depreciation and amortization
- m₁, m₂, m₃
- Market multiples for SDE, EBITDA and revenue
Worked examples
Service business with $1M revenue
$250,000 SDE × 2.8 = $700,000; $180,000 EBITDA × 4.5 = $810,000; $1,000,000 revenue × 0.8 = $800,000. The average of the three is $770,000, with a range of $700,000 to $810,000.
Smaller shop with a $50,000 loan to repay
The three methods give $375,000, $315,000 and $300,000, averaging $330,000. Paying off the $50,000 loan at closing leaves the owner about $280,000 before fees and taxes.
Growing company valued on EBITDA and revenue
SDE × 3.2 = $2.88M, EBITDA × 5.5 = $4.125M and revenue × 1.0 = $5M. The wide spread is a sign that a company this size is usually valued on EBITDA; the blended figure is about $4.0M.
Frequently asked questions
How much is my small business worth?+
Most small businesses sell for a multiple of their earnings. Owner-operated companies are commonly priced at roughly 2–4 times SDE, while larger firms with management teams are often valued at a multiple of EBITDA. Industry, growth, risk and owner dependence move the multiple up or down.
What is the difference between SDE and EBITDA?+
SDE adds back one owner’s entire salary and perks to profit, showing the total cash benefit to a single owner-operator. EBITDA instead deducts a market-rate salary for management, so it is lower than SDE and suits businesses that would be run by hired managers.
What affects a business valuation multiple?+
Buyers pay higher multiples for steady or growing earnings, recurring revenue, diversified customers, documented processes, low owner dependence and clean financial records. Declining sales, one large customer or heavy reliance on the owner push multiples down.
Should I use a revenue multiple to value my business?+
Revenue multiples ignore profitability, so they are best used as a sanity check or for fast-growing, subscription or tech businesses where profit is not yet representative. For most profitable small businesses, earnings multiples are more reliable.
Is this the same as a professional appraisal?+
No. A certified valuation analyst also reviews financial statements, adjusts earnings, weighs income and asset approaches, and researches comparable transactions. Use this calculator for a quick estimate before engaging a broker or appraiser.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.