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Business Valuation Calculator

Estimate what your business is worth using three proven valuation methods — Revenue Multiple, SDE, and EBITDA. Get an instant range based on real industry data.

Include all operating expenses, COGS, payroll (including owner salary), rent, etc.

Frequently Asked Questions

How do you calculate business valuation?

Business valuation is typically calculated using one or more of three methods: (1) Revenue Multiple — your annual revenue multiplied by an industry-standard multiple, (2) SDE (Seller's Discretionary Earnings) — your adjusted owner earnings multiplied by an SDE multiple, and (3) EBITDA — earnings before interest, taxes, depreciation, and amortization multiplied by an EBITDA multiple. Our calculator uses all three methods and provides a blended average.

What is SDE (Seller's Discretionary Earnings)?

SDE is the total financial benefit a single owner-operator derives from a business annually. It includes net income plus the owner's salary, benefits, perks, and any discretionary or one-time expenses. SDE multiples are the most common valuation method for small businesses (under $5M revenue) being sold to individual buyers.

When should I use EBITDA vs SDE for valuation?

Use SDE for owner-operated small businesses where the owner is actively involved in daily operations. Use EBITDA for larger businesses ($5M+ revenue) with professional management in place, or when selling to institutional buyers like private equity firms. EBITDA removes the owner's salary to reflect what the business earns independent of ownership.

What are typical valuation multiples by industry?

Multiples vary significantly by industry. SaaS businesses often trade at 4-8x EBITDA, while restaurants may trade at 2-4x. Home services (HVAC, plumbing) typically see 4-6x EBITDA. Manufacturing ranges from 4-6x. These are broad ranges — actual multiples depend on growth rate, customer concentration, recurring revenue, and other factors.

How accurate is this calculator?

This calculator provides a directional estimate based on industry averages. Actual business valuations depend on many factors including growth trends, customer concentration, competitive moats, market conditions, and deal terms. For a precise valuation, work with a professional business appraiser or M&A advisor. This tool is best used as a starting point for understanding approximate value.

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