Business Valuation Calculator
Estimate what your business is worth using three standard valuation methods.
Business Financials
Estimated Business Value
$306,667
Range: $300,000 – $700,000
SDE Multiple
$520,000
2.6x SDE
Revenue Multiple
$300,000
0.6x Revenue
Asset-Based
$100,000
Assets - Liabilities
Key Metrics
SDE
$200,000
SDE Multiple
2.6x
Revenue Multiple
0.6x
Net Assets
$100,000
Valuation Notes
- These are rough estimates. A professional business appraiser considers customer concentration, employee retention, IP, and market conditions.
Rough estimates using industry-average multiples. For transactions, hire a certified business appraiser (CBV/ASA).
Three Ways to Value a Small Business
The SDE multiple method is the most common for small businesses under $5M. Seller's Discretionary Earnings (SDE) = net profit + owner salary + owner perks. Multiply SDE by an industry-specific factor (typically 2–4x). The revenue multiple method works best for high-growth or SaaS businesses where profits haven't caught up to revenue. The asset-based method sets a floor value — useful for asset-heavy businesses like manufacturing or real estate holding companies.
SDE Multiples by Industry (2026)
| Industry | SDE Multiple Range | Revenue Multiple Range | Key Value Driver |
|---|---|---|---|
| SaaS / Software | 3.0–8.0x | 2.0–8.0x | MRR, churn rate, growth |
| Healthcare | 2.5–5.0x | 0.5–1.5x | Patient base, contracts |
| E-Commerce | 2.5–4.5x | 0.5–1.5x | Brand, product mix, traffic |
| Professional Services | 2.0–4.0x | 0.5–1.2x | Client relationships, recurring revenue |
| Manufacturing | 2.0–4.5x | 0.4–0.8x | Equipment, contracts, IP |
| Retail | 1.8–3.5x | 0.3–0.7x | Location, lease, inventory |
| Restaurant | 1.5–3.0x | 0.3–0.6x | Location, concept, lease terms |
| Construction | 1.5–3.0x | 0.2–0.5x | Backlog, equipment, licenses |
What Increases (or Decreases) Business Value
Premium factors: recurring revenue, diverse customer base (no single client over 15%), strong growth trend, systems that run without the owner, valuable IP or brand. Discount factors: owner-dependent operations, customer concentration, declining revenue, lease risk, pending litigation. A business that runs itself sells for 2–3x more than one that depends entirely on the owner.
Frequently Asked Questions
What's the difference between SDE and EBITDA?
SDE (Seller's Discretionary Earnings) adds back the owner's salary and personal expenses to net income — it shows what one owner-operator earns. EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) is used for larger businesses ($5M+ revenue) where a professional manager would replace the owner. EBITDA multiples are typically higher (4–8x) because they represent a larger earnings base after paying a manager.
How do I increase my business value before selling?
Start preparing 2–3 years before selling. Document all processes, reduce owner dependency, diversify your customer base, clean up financials, and invest in growth. Businesses with 3+ years of clean, growing financial records sell faster and at higher multiples. Consider hiring a broker — they typically achieve 10–20% higher sale prices than DIY sellers.
See also: Break-Even Calculator and Profit Margin Calculator.