Business Valuation Calculator
Estimate what your small business is worth using three industry-standard valuation methods: SDE multiples, EBITDA multiples, and revenue multiples.
Industry
Business Financials
SDE = Net Profit + Owner Compensation = $180,000
Custom Multiple Adjusters
Drag to set your expected multiple within the Service Business range.
SDE Multiple Method
Best for owner-operated businesses under $5M in earnings
SDE = $180,000 (Net Profit $100,000 + Owner Compensation $80,000)
EBITDA Multiple Method
Best for businesses with management in place or over $1M EBITDA
EBITDA = $150,000
Revenue Multiple Method
Cross-check only — less accurate for most small businesses
Annual Revenue = $500,000
Method Comparison at Your Custom Multiples
How This Calculator Works
SDE (Seller's Discretionary Earnings) = Net Profit + Owner's Total Compensation. This is the primary metric used to value owner-operated small businesses because it captures the true economic benefit available to a new owner.
SDE Valuation = SDE × industry multiple. Industry multiples range from 1.5–2.5× for low-margin businesses (retail, restaurants) up to 3–6× for sticky, recurring-revenue models (SaaS, subscription services).
EBITDA Valuation = EBITDA × industry multiple. EBITDA does not add back owner compensation, making it appropriate for businesses with a management layer in place. EBITDA multiples are higher than SDE multiples to compensate for the lower base.
Revenue Valuation = Annual Revenue × industry multiple. This is a rough cross-check — it ignores profitability entirely and should never be the sole basis for a purchase price.
The overall range spans from the lowest low estimate across all three methods to the highest high estimate. Most deals close somewhere in the middle of this range based on negotiation, due diligence findings, and deal structure.