Business Valuation Calculator
What a small business is worth from its earnings and a multiple — presented as a range, because the multiple is a negotiation rather than a fact.
The address carries whatever you changed, so anyone opening it sees these numbers. Nothing is saved on our side.
Estimated value
$1,176,000
A range of $980,000 to $1,372,000 on $392,000 of earnings at 2.5× to 3.5×. The range is 33% wide, and that width is the honest part — the multiple is the least certain input in any valuation.
- $980,000
- 2.5× earnings
- $1,372,000
- 3.5× earnings
- $1,176,000
- Inventory included
- $1,176,000
- After debt and cash
What each multiple is worth
One turn of the multiple is worth a year of earnings. On this business that is the difference between a comfortable retirement and a very comfortable one, which is why the number is argued over so hard.
| Multiple | Value | Difference | vs yours |
|---|---|---|---|
| 2× | $784,000 | −$0 more in total | |
| 2.5×yoursIn your range | $980,000 | — | |
| 3×yoursIn your range | $1,176,000 | — | |
| 3.5×yoursIn your range | $1,372,000 | — | |
| 4× | $1,568,000 | −$0 more in total | |
| 5× | $1,960,000 | −$0 more in total |
Nothing here tells you which multiple is right, because nothing can. It depends on the industry, the size, the growth, how concentrated the customers are, how dependent the business is on the owner, and what buyers happen to be paying this year. A broker who has sold businesses like yours recently knows more about it than any formula.
How this calculator works
One multiplication, and three adjustments that decide what actually changes hands.
value = earnings × multiple
equity value = value − debt + cash
asking price = value + inventory (if on top)
The multiple has to be quoted against the same earnings you entered. A 3× SDE multiple and a 3× EBITDA multiple are very different offers on the same business — see the SDE Calculator for the gap between them.
What is assumed
- The earnings are sustainable and provable. A good year is not a valuation.
- The multiple you enter reflects a real market, not a hope.
- Nothing about deal terms. A full-cash offer and a heavily-deferred one at the same headline price are not worth the same.
A worked example
A business with $392,000 of SDE, valued at 2.5× to 3.5×.
| Annual earnings | SDE, one working owner |
|---|---|
| At 2.5× | The low end |
| At 3.5× | The high end |
| Range width | 392,000 ÷ 1,176,000 |
| Midpoint | The number to start from, not to settle on |
A single turn of the multiple is worth $392,000 here — a whole year of earnings, and more than most sellers will make in the years they spend building toward the sale. That is the size of the argument, and it is why it is worth preparing for.
Questions people ask
Nothing here will tell you, because nothing honestly can. Multiples depend on the industry, the size of the business, whether revenue is growing, how concentrated the customers are, how much depends on the owner personally, and what buyers are paying this year. A broker who has closed deals in your sector recently knows more about your multiple than any calculator. What this page does is show you what each multiple is worth so the conversation is informed.
Because a single number would be false precision on the least certain input in the whole calculation. Earnings can be established from documents; the multiple is a negotiation. A range shows the size of the argument you are about to have.
Recurring revenue, a diversified customer base, documented systems, a management team that runs the business without the owner, clean and reviewed books, and a growth trend. What lowers it: one customer worth 40% of revenue, an owner who is the business, declining sales, and books that need explaining.
It is negotiated, and it is worth settling early because it can be a large number. Many listings quote a price 'plus inventory at cost', which means the buyer pays for saleable stock on top. Others include it. The calculator handles both, because assuming either would mislead half the people reading.
No. A real valuation considers the balance sheet, the quality and durability of the earnings, working capital requirements, the assets being transferred and the terms of the deal — including how much of the price is deferred, which changes what it is worth. Use this to frame the conversation, not to conclude it.
Buying a business
SDE CalculatorSeller's discretionary earnings from a P&LRelated calculators
An estimate, not a valuation. It considers no balance sheet, no working capital requirement and no deal terms, each of which changes what a business is actually worth.