Business Valuation Calculator
Estimate the market value of your company using the EBITDA Multiplier method.
2x (Retail / Service)
3x (Standard Small Biz)
4x (Manufacturing)
5x (High Growth / Tech)
8x (SaaS / Specialized)
Estimated Enterprise Value
$0.00
How to Calculate Business Value
Determining the worth of a business is both an art and a science. The most common method for small to medium-sized enterprises is the SDE (Seller's Discretionary Earnings) or EBITDA Multiplier method. This calculator uses the Enterprise Value formula to give you a baseline figure for negotiations.
Understanding the Components
- EBITDA: This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It represents the raw operational profitability of your business.
- The Multiplier: This number reflects the risk and growth potential. A local coffee shop might have a 2x multiplier, while a recurring software business might command an 8x or higher multiplier.
- Net Cash: In most "cash-free, debt-free" deals, the buyer takes the business assets, but the seller keeps the cash and clears the debts. This calculator factors these in to find the final Equity Value.
Example Calculation
Imagine a local manufacturing company with an annual profit (EBITDA) of $250,000. If the industry standard multiplier is 4x, the core business value is $1,000,000. If the business has $100,000 in the bank and $50,000 in outstanding loans, the calculation would be:
($250,000 × 4) + $100,000 – $50,000 = $1,050,000 Total Value.
Factors That Increase Your Valuation
- Recurring Revenue: Subscription-based models are worth significantly more than one-time sales.
- Clean Financials: Verifiable tax returns and P&L statements reduce buyer risk.
- Systematization: A business that can run without the owner present is much more valuable.
- Customer Concentration: Having no single client representing more than 10-15% of revenue increases stability.