Business Valuation Calculator
Get an instant estimate of what your business is worth based on industry multiples and your financial metrics. Free, no signup required.
Optional - helps refine estimate
Net income + owner salary + add-backs
This calculator provides estimates based on industry averages. Actual valuations depend on many factors including financial performance, growth trends, market conditions, and buyer demand. For a professional valuation, consult with M&A advisors.
Typical Valuation Multiples by Industry
Valuation multiples vary significantly across industries. Here are typical ranges for businesses with $500K-$5M in SDE.
Healthcare
View allProfessional Services
Manufacturing
View allConsumer Services
View allHow Business Valuation Works
Most small and mid-sized businesses are valued using a multiple of earnings. The two most common metrics are:
SDE (Seller's Discretionary Earnings)
Best for owner-operated businesses under $5M in revenue. Includes owner salary, benefits, and add-backs.
EBITDA
Used for larger businesses with professional management. Represents operational profitability.
What Affects Your Multiple
Recurring Revenue
Contracts, subscriptions, and maintenance agreements reduce risk and increase value.
Customer Diversification
Low concentration across customers means less risk if any single customer leaves.
Owner Dependency
Businesses that rely heavily on the owner are riskier and trade at lower multiples.
Growth Trends
Consistent growth in revenue and profitability commands premium valuations.
Industry Dynamics
Some industries (like MSPs) command higher multiples due to buyer demand.
Frequently Asked Questions
How do you calculate business valuation?
Business valuation is typically calculated by applying an industry-specific multiple to the company's earnings (SDE or EBITDA). The multiple varies based on factors like industry, size, growth, recurring revenue, and owner dependency. Our calculator uses industry average multiples and adjusts based on your specific business characteristics.
What is SDE vs EBITDA?
SDE (Seller's Discretionary Earnings) is net income plus owner salary and benefits, plus non-cash expenses and one-time costs. It's commonly used for smaller businesses. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is used for larger businesses and represents operational profitability before non-operating items.
What multiple is typical for my industry?
Multiples vary significantly by industry. Home services businesses (HVAC, plumbing) typically trade at 2.5-4.5x SDE. Healthcare practices (dental, veterinary) command 3-6x SDE. Technology services (MSPs) can reach 5-7x SDE due to recurring revenue. Our calculator provides industry-specific ranges.
What increases business valuation?
Key value drivers include: recurring revenue and long-term contracts, diversified customer base (low concentration), management team that can operate without the owner, documented processes and systems, growth trends, and clean financial records. Our calculator factors in these adjustments.
How accurate is this calculator?
This calculator provides estimates based on industry averages and the factors you provide. Actual valuations can vary significantly based on detailed financial analysis, market conditions, buyer demand, and negotiation. For an accurate valuation, consult with M&A professionals who can analyze your specific situation.
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