🏛️ Business Valuation Calculator
Every owner wants one number; every buyer runs several. This model values your business the way small-business buyers actually do: a multiple of seller's discretionary earnings (SDE), adjusted for growth, track record, owner dependence, and recurring revenue, then cross-checked against a revenue multiple. You get the range and the single most defensible number to say out loud in a sale conversation.
Seller's discretionary earnings: net profit plus your own salary and personal perks run through the business. It is what one owner-operator truly takes out.
1 means it runs without you; 10 means it collapses the day you step away. Be honest; buyers will be.
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Estimates for planning, not financial advice. Your real numbers will vary; that is exactly why you track them.
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What is SDE and why do buyers use it?
Seller's discretionary earnings: net profit plus the owner's salary, benefits, and personal perks run through the business. It answers the buyer's real question: 'how much cash does this business put in one owner-operator's pocket?' Small businesses under about $5 million in revenue overwhelmingly trade on SDE multiples, most commonly 1.5x to 4x.
What moves the multiple up or down?
The model starts at 2.5x (the broad small-business midpoint) and adjusts for the four things buyers probe first: growth (above 10 percent a year adds, decline subtracts), track record (each year past 3 adds, capped), owner dependence (the biggest discount in small-business deals), and recurring revenue (the biggest premium). The result is clamped to the realistic 1x to 4.5x band.
Why show a revenue multiple too?
As a cross-check. Revenue multiples (commonly 0.3x to 1.5x for small businesses, higher only with strong recurring revenue) catch cases where profit is temporarily distorted. When the two methods disagree wildly, buyers trust the SDE number and so should you; the range here brackets both.
Is this what my business will actually sell for?
It is a well-grounded estimate, not an appraisal. Real sale prices move with industry, location, deal terms, and how clean your books are. Use this number to decide whether to sell, to set expectations, and to pick which value-driver to improve; use a broker or accredited appraiser to run a live deal.
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