Tool
Business Valuation Estimator
Apply a low and high multiple to your SDE or EBITDA for a directional valuation range. A starting point, not an appraisal.
Results
- Low estimate
- $750,000
- High estimate
- $1,050,000
- Midpoint
- $900,000
Directional only. Multiples vary widely by industry, size, growth, and deal terms. SDE for owner-operated; EBITDA for larger businesses.
This calculator provides directional estimates for informational purposes only and is not tax, legal, or financial advice. Results depend on the inputs you provide. For advice specific to your situation, book a Discovery Meet.
What this calculator does
This tool produces a directional value range for a business by applying low and high industry multiples to its earnings (SDE or EBITDA). Enter the earnings figure and a multiple range. It's built for owners who want a rough sense of what their business might be worth — for planning, partnership decisions, or curiosity — well before engaging a professional appraiser.
How it works
Most small and mid-sized businesses are valued as a multiple of earnings. Owner-operated businesses typically use SDE (Seller's Discretionary Earnings — profit plus the owner's salary and perks); larger ones use EBITDA.
Multiply the earnings figure by a low and a high multiple to get a range, with the midpoint as a rough central estimate. The multiple reflects industry, size, growth, and risk.
A worked example
For a business with $300,000 in annual SDE and an industry multiple range of 2.5×–3.5×:
Low estimate = $300,000 × 2.5 = $750,000
High estimate = $300,000 × 3.5 = $1,050,000
Midpoint ≈ $900,000
A roughly $750K–$1.05M range — a starting point for thinking about value, not a price tag.
How to read your result
Treat the output as a conversation starter, not an appraisal. Real selling prices depend on factors no multiple captures: customer concentration, how dependent the business is on the owner, growth trajectory, recurring vs. one-time revenue, clean books, and deal terms. Two businesses with identical earnings can sell for very different prices. The cleaner and more transferable your financials and operations, the higher the multiple a buyer will pay — which is itself an argument for strong accounting.
Common mistakes
- ·Using the wrong earnings base. SDE (which adds back owner compensation) and EBITDA are different numbers; applying an SDE multiple to EBITDA, or vice versa, gives a wrong answer.
- ·Borrowing a multiple from the wrong industry. Multiples vary widely; a software multiple applied to a restaurant is meaningless.
- ·Ignoring owner dependence. A business that can't run without you is worth less than its earnings suggest, because the buyer is also buying a job.
Frequently asked questions
What's the difference between SDE and EBITDA?+
SDE (Seller's Discretionary Earnings) is profit plus the owner's salary, benefits, and discretionary expenses — used for owner-operated small businesses. EBITDA is earnings before interest, taxes, depreciation, and amortization — used for larger businesses with management in place. Use the multiple that matches your earnings type.
Where do the multiples come from?+
They're drawn from comparable sales in your industry and reflect size, growth, risk, and recurring-revenue quality. Industry sources and brokers publish typical ranges. This tool lets you enter your own low and high so you can model different assumptions.
Is this an official valuation?+
No — it's a directional estimate for planning only. A formal valuation considers your specific financials, customer base, contracts, and market, and is done by a qualified appraiser or M&A advisor. Use this to get oriented before that conversation.
How do I increase my multiple?+
Reduce owner dependence, grow recurring revenue, diversify your customer base, keep clean and consistent financials, and show a clear growth trend. Buyers pay higher multiples for businesses that are lower-risk and easier to take over.
Want a real answer, not just a calculator?
A calculator gives you a directional number. A free Discovery Meet gives you a CPA who reviews your actual books, structure, and goals.
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