Business Valuation Calculator
Estimate your business value using four industry-standard methods with value driver adjustments, scenario modeling, and sensitivity analysis across 22 industries. All calculations happen locally — nothing leaves your browser.
How to Use the Business Valuation Calculator
- Choose earnings basis — SDE for owner-operated businesses under $3M, EBITDA for larger or management-run companies.
- Enter financial data — revenue, profit, and growth rate.
- Select your industry — multiples vary significantly across 22 sectors.
- Add value drivers — recurring revenue, customer concentration, and owner dependency affect your multiple.
- Review scenarios — see conservative, realistic, and optimistic valuation ranges.
Understanding Valuation Methods
Revenue Multiple values a business as a multiple of annual revenue. SaaS companies command 4–12x due to recurring revenue, while construction may only justify 0.3–1.2x.
SDE / EBITDA Multiple uses net profit. SDE includes owner compensation and is standard for small businesses; EBITDA excludes owner comp and suits mid-market companies.
Discounted Cash Flow (DCF) projects 5 years of future cash flows, discounted at a risk-adjusted rate (10–18%). Best for businesses with predictable, growing cash flow.
Asset-Based calculates net asset value (assets minus debt). Provides a floor valuation — the minimum the business is worth based on tangible holdings.
Value Drivers Explained
Recurring Revenue commands a premium — SaaS with 80%+ recurring revenue can see 20%+ valuation uplift. One-time transactional revenue is discounted.
Customer Concentration adds risk. If one customer represents 50%+ of revenue, buyers discount the valuation by ~20% due to dependency risk.
Owner Dependency is critical for small businesses. A business that can't operate without the owner may be worth 25% less than one with a management team in place.
Growth Trajectory matters — accelerating growth signals momentum and can add 15% to valuation. Declining growth raises concerns.
Frequently Asked Questions
Use SDE for owner-operated businesses under approximately $2–3M in deal size where the owner's compensation is significant. Use EBITDA for larger businesses with a professional management team in place. SDE = Net Profit + Owner Salary + Add-Backs. EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization.
No single method is universally best. Startups with high growth but low profit favor revenue multiples. Mature, profitable businesses are better valued with profit multiples or DCF. The weighted average across all methods provides the most balanced estimate.
Value drivers can swing your valuation by 30–50%. A SaaS business with 80%+ recurring revenue, low owner dependency, and accelerating growth could be worth 50%+ more than an identical business without those characteristics. Focus on reducing customer concentration and building a team that doesn't depend on you.
The discount rate reflects risk. Lower-risk businesses (stable, diversified revenue) use 10–12%. Higher-risk businesses (startups, concentrated customers) use 15–18%. The calculator adjusts based on your growth rate and years in business.
This calculator provides directional estimates. For actual M&A transactions, you'll need professional due diligence, financial audits, and potentially a formal business appraisal. Use this tool to frame negotiations and set expectations.
Use Cases
Selling a Business
Get a realistic valuation range before listing. Understand what value drivers to improve.
Acquisition Research
Estimate fair value when evaluating potential business acquisitions or mergers.
Fundraising Prep
Prepare valuation expectations before pitching to investors or applying for SBA loans.
Strategic Planning
Track business value over time. See how improving value drivers impacts your worth.