Business Valuation Calculator
Estimate what a small business is worth from its earnings and a multiple. Enter SDE or EBITDA, choose a multiple, and see a conservative-to-optimistic valuation range.
A quick earnings-multiple estimate. Real pricing depends on growth, customer concentration, owner dependence, and deal terms. Not sure of the earnings figure? Calculate SDE first.
Valuing a business on an earnings multiple
Nearly every main-street business is priced as a multiple of its earnings. The logic is simple: a buyer is paying today for a stream of future cash flow, and the multiple captures how confident the market is in that stream continuing. A stable, diversified, manager-run business earns a higher multiple than one that depends entirely on the seller.
The range this tool shows matters more than any single number. It frames a negotiation: the conservative figure is your walk-away, the optimistic one is the seller's ask, and the deal lives somewhere in between.
Frequently asked questions
How do you value a small business?
The most common method for main-street businesses is an earnings multiple: value equals SDE (or EBITDA) times a multiple that reflects the risk, growth, and size of the business.
What multiple should I use?
Main-street businesses commonly sell for 2x to 4x SDE. Larger, faster-growing, or less owner-dependent businesses that report on EBITDA can command higher multiples.
Should I use SDE or EBITDA?
Use SDE for owner-operated businesses under roughly $1M in earnings, and EBITDA for larger businesses run by a management team. Multiples differ between the two, so match the basis to the multiple.
Does this replace a professional valuation?
No. It is a fast estimate for screening deals. A formal valuation weighs financial history, customer concentration, contracts, and market comparables in far more detail.
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