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Business Valuation Calculator

Estimate what a small business is worth using revenue and earnings multiples.

About the Business Valuation Calculator

Enter yearly revenue, seller's discretionary earnings (or EBITDA), the revenue and earnings multiples for your industry, and any debt the buyer takes on. The calculator gives a value range, its midpoint and the equity left for the seller.

Small businesses usually sell for a multiple of seller's discretionary earnings, often 2–4× for main-street businesses; larger firms trade on EBITDA multiples. Revenue multiples suit fast-growing or recurring-revenue companies.

The formula

Value = earnings × multiple (or revenue × multiple)

Worked example

Revenue 2,000,000 at 0.8×; earnings 400,000 at 3×

  1. By revenue: 1,600,000
  2. By earnings: 1,200,000
  3. Range 1.2–1.6 million, midpoint 1.4 million

Things to keep in mind

  • A rough guide: a formal valuation also looks at assets, cash flow, risk and how much the business depends on its owner.

Questions people ask

Where do I find multiples?

Broker data, industry reports and recent comparable sales.

Is this a formal valuation?

No; a qualified valuer considers assets, cash flow and risk in detail.

What raises a multiple?

Recurring revenue, growth, diverse customers and a business that runs without the owner.