Business Valuation Calculator
Estimates the fair market value of a small business using earnings multiples and financial metrics
Net profit after all expenses and taxes
Typical range is 2x to 6x depending on industry
Net earnings plus owner salary and discretionary expenses
Enter earnings and multiple to see valuation
Enter SDE for an alternative valuation estimate
Frequently Asked Questions
How do you value a small business?
The most common method for small businesses is the earnings multiple approach: multiply annual net earnings or seller's discretionary earnings (SDE) by an industry-specific multiple, typically 2-5x. Other methods include asset-based and discounted cash flow valuations.
What is an industry multiple?
An industry multiple is the factor applied to earnings to estimate business value. It varies by industry, growth rate, and risk. Stable businesses like accounting firms may use 2-3x. High-growth tech companies might use 5-10x or more.
What is seller's discretionary earnings (SDE)?
SDE is net profit plus the owner's salary, benefits, and any personal expenses run through the business. It represents the total financial benefit available to a single owner-operator and is the most common earnings metric for valuing small businesses.
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