Business Valuation Calculator: Business Appraisal and Business Value Calculator for What Your Business Is Worth
Enter revenue and earnings. Three methods run on the same numbers, an SDE multiple, an EBITDA multiple and a discounted cash flow, and the answer comes back as a range benchmarked to what comparable US businesses actually sold for.
Estimated business value
Method breakdown
What moves this number
Estimate, not a certified appraisal. Your figures are not stored.
In short
A business valuation calculator takes your revenue and your true owner earnings and multiplies them by what comparable businesses in your sector actually sold for. Most US small businesses land between two and four times seller discretionary earnings, with an all-industry average near 2.5x; once earnings pass roughly $1M the metric switches to adjusted EBITDA and the range moves to about four to seven times. The arithmetic is the easy part. What a calculator cannot see is customer concentration, owner dependency, lease terms and whether your add-backs will survive a buyer looking at your bank statements, which is why the honest output is a range rather than a number.
Last updated August 2026
The arithmetic
The four calculations behind the number
Every credible valuation calculator is running one or more of these. A calculator that reports a single figure without telling you which method produced it is hiding the assumption that matters most. Running all four on the same inputs is more useful, because the spread between them tells you how much disagreement your business invites.
| Method | Formula | Best fit | Typical 2026 range |
|---|---|---|---|
| SDE multiple | Seller discretionary earnings x industry multiple | Owner-operated businesses under roughly $1M of earnings | 2.0x to 4.5x SDE All-industry average about 2.5x across roughly 9,500 broker-reported 2025 sales. |
| EBITDA multiple | Adjusted EBITDA x industry multiple | Businesses above roughly $1M of earnings, or any business with hired management | 3.1x to 7.0x EBITDA Lower middle market buyouts averaged 5.9x at $10M to $25M of enterprise value in 2025. |
| Revenue multiple | Annual revenue x sector multiple | Pre-profit, high growth, or recurring revenue businesses | 0.42x to 1.18x revenue Private US small businesses averaged about 0.67x revenue. Public listed firms averaged 3.97x. |
| Discounted cash flow | Sum of projected free cash flow discounted to today, plus a terminal value | Stable, forecastable earnings where the buyer is pricing the future, not the past | Discount rates of 15% to 25% are normal for private companies Highly sensitive to the discount rate and terminal growth you assume. |
The choice between SDE and EBITDA is not a preference, it is a function of size. SDE adds the owner salary back because the buyer is stepping into the job. EBITDA leaves a market-rate manager salary as a cost because the buyer is not going to run the business personally. Use the wrong one and you will misprice the business by whatever a general manager costs in your market, which on a 3x multiple is usually a six-figure error.
Line by line
One business, four methods, and the range they produce
Take a residential HVAC contractor doing $1,800,000 in revenue with $420,000 of seller discretionary earnings. A market-rate general manager in that market costs about $95,000, so adjusted EBITDA is $325,000. That is a 23.3% SDE margin, which sits close to the 22.0% implied margin for the construction and trades category, so the numbers are internally consistent before we start.
| Method | Calculation | Result | Multiple source |
|---|---|---|---|
| Revenue multiple | $1,800,000 x 0.56x | $1,008,000 | Building and construction private average |
| EBITDA multiple | $325,000 x 3.1x | $1,007,500 | Median for trades businesses under $1M EBITDA |
| SDE multiple | $420,000 x 2.80x | $1,176,000 | Broker-reported HVAC median |
| Discounted cash flow | 5 years at 18%, 2.5% terminal | $1,429,921 | 4% growth, $60,000 capex, 25% tax |
$1.01M
Bottom of the range
Revenue and EBITDA methods agree almost exactly
$1.16M
Midpoint of the four
Where a broker would most likely list it
$1.43M
Top of the range
The DCF, which rewards the 4% growth assumption
Three of the four methods cluster between $1.0M and $1.2M, and the discounted cash flow sits about 23% above them because it capitalizes the growth assumption rather than the trailing year. That spread is the useful output. A tight cluster means the business is priced by its earnings and the negotiation will be short. A wide spread means the buyer and the seller are going to argue about the future, and the seller should expect part of the gap to arrive as an earnout rather than cash at closing.
The financing check
At the $1,176,000 SDE-method price, a buyer putting 10% down borrows $1,058,400. On a 10 year SBA 7(a) note at 10.5% that is about $171,378 a year of debt service. After a $90,000 buyer salary and $60,000 of capital spending, $270,000 of the SDE remains, which covers debt service 1.58 times over. Comfortably above the 1.25x most lenders want, so this price is financeable. Run that test on any number a calculator gives you: if an SBA buyer cannot service the debt, the price is theoretical. See how lenders value a business for an SBA loan for the full underwriting view.
Your row
Size changes the multiple more than industry does
Owners tend to search for their industry multiple first. Size is the stronger variable. The same business, at four times the earnings, sells for a meaningfully higher multiple, because larger businesses have management depth, better records and a wider pool of buyers competing for them. These are median purchase-price bands from the 2026 US market.
| Earnings or deal size | Metric | Median multiple | What is going on in this band |
|---|---|---|---|
| Under $500,000 | SDE | 2.0x | Owner is the business. Buyer is usually an individual using an SBA loan. |
| $500,000 to $1,000,000 | SDE | 2.8x | Still SDE priced. Some brokers begin presenting EBITDA alongside. |
| $1,000,000 to $2,000,000 | SDE | 3.0x | The transition zone. Management depth starts to matter more than earnings. |
| $2,000,000 to $10,000,000 | EBITDA | 4.0x to 6.0x | Private equity add-on territory. Priced on adjusted EBITDA. |
| $10,000,000 to $25,000,000 | EBITDA | 5.9x | Platform-scale. Institutional buyers, audited or reviewed financials. |
| $25,000,000 to $50,000,000 | EBITDA | 6.6x | Competitive auction dynamics begin to lift the multiple. |
For the sector-level number rather than the size-level number, we publish three reference tables built from separate sources: SDE multiples by industry across more than 90 small business sectors, EBITDA multiples by industry for larger businesses and deal size bands, and revenue multiples by industry covering both the public and private series. Find your row there, then bring the multiple back to the calculator above.
Within your row
Six things that move the multiple inside your industry range
Industry sets the range. These decide where inside it you land, and most of them are within an owner reach in the twelve to twenty four months before a sale.
Owner dependency
The single largest discount on Main Street. A business that cannot run for two weeks without the owner routinely prices 1.0x to 2.0x SDE below an otherwise identical business with a general manager in place.
Customer concentration
One customer above 20% of revenue draws a discount. Above 40% it can end a deal outright, because the buyer is really buying one contract.
Recurring or contracted revenue
Moving 10 percentage points of revenue from one-off jobs into service agreements is worth roughly 0.5x to 1.0x on the multiple in the trades.
Clean books
Add-backs a buyer cannot verify get removed from earnings, not argued about. Every $10,000 of rejected add-backs costs $28,000 of price at a 2.8x multiple.
Growth rate
Two businesses with identical earnings and different trajectories do not price the same. Consistent growth is the cheapest multiple expansion available to an owner.
Transferability
Assignable leases, licenses that survive a sale, and a documented customer list. These are worth nothing on an income statement and a great deal at closing.
The full treatment of these, with the order to work on them in, is on our value drivers page and in the guide to increasing business value before selling.
Honest limits
Where a calculator stops and an appraisal starts
A calculator prices the earnings you give it. It has no way to know whether those earnings are real, transferable or repeatable. In practice the gap between a calculator estimate and a closed price comes from a short list of things no tool can observe:
- Add-backs that will not survive a buyer reading your bank statements
- A lease with two years left and no assignable renewal option
- Revenue concentrated in relationships that belong to you personally
- Deferred maintenance or equipment at the end of its life
- Licensing, permits or certifications that do not transfer to a new owner
- Working capital, which is negotiated separately and moves the net proceeds
When you need the appraisal instead
An estimate is the right tool for deciding whether to sell, setting an asking price with a broker, planning a partner buyout conversation or tracking whether your value is growing. A certified appraisal is the right tool when someone else has to accept the number: an SBA lender, the IRS, a divorce court, an ESOP trustee or a buyout agreement that names an appraiser.
Certified valuations for a business under $10M of revenue typically run $2,000 to $10,000 and take up to 20 business days. We break the engagement types and their price ranges down in what a business valuation costs and in certified appraisal versus estimate.
Questions
What owners ask before they run the numbers
How much is my business worth?
Most privately held US businesses sell for two to four times seller discretionary earnings, or four to seven times adjusted EBITDA once earnings pass roughly $1M. Multiply your true owner earnings by the multiple your industry and size band supports, then widen the result into a range. A single number is almost always wrong; the range is the honest answer.
How do you calculate the value of a business?
Start with normalized earnings: net profit plus owner compensation, interest, depreciation, amortization and any non-recurring costs. That gives you SDE. Multiply SDE by the multiple your sector supports. Cross-check the result with a revenue multiple and a discounted cash flow. Where the three methods cluster is your defensible range.
What is the formula for valuing a business?
The working formula for a small business is value equals SDE multiplied by an industry multiple. For larger businesses it becomes adjusted EBITDA multiplied by a multiple. Both are shorthand for the same idea: a buyer is paying today for a stream of future earnings, discounted for the risk that the stream does not continue.
How accurate are business valuation calculators?
A calculator is accurate about the arithmetic and blind to the risk. It applies a market multiple to the earnings you enter, so it lands close on a clean, average business in a well-traded sector, and it can be far off when there is customer concentration, owner dependency, a short lease or earnings that will not survive diligence. Treat the output as a starting range.
How many times profit is a business worth?
For US small businesses, roughly two to four times seller discretionary earnings, with an all-industry average near 2.5x. Above about $1M of earnings the metric switches to adjusted EBITDA and the range moves to roughly four to seven times. Sector matters more than most owners expect: marinas cleared 6.60x SDE in 2025 while distribution routes cleared 1.51x.
Can I value my business based on revenue?
You can, and you should treat it as a sanity check rather than the answer. Private US small businesses sold at an average of about 0.67x annual revenue, but that average hides everything: a revenue multiple is really a profit margin assumption in disguise. Use revenue when the business is pre-profit or growing fast enough that current earnings understate it.
How much can I sell my business for?
What a buyer will finance is often the real ceiling on Main Street. An SBA 7(a) buyer needs the business to cover debt service after paying themselves a market salary, which caps most financed deals somewhere around 3.5x to 4.5x SDE depending on earnings size, interest rates and capital needs. Above that ceiling you need a cash buyer or seller financing.
Is a business valuation calculator the same as a business appraisal?
No. A calculator produces an estimate from the figures you enter, in minutes, for your own planning. A certified appraisal is an engagement in which a credentialed appraiser verifies your financials, applies recognized standards and signs a defensible report, typically for $2,000 to $10,000 and up. Courts, the IRS and lenders want the appraisal. Owners deciding whether to sell want the estimate first.
What multiple should I use for my industry?
Use broker-reported closed sale data for your sector rather than a public market table, unless you are benchmarking against listed companies. Our SDE multiples page covers more than 90 small business sectors, the EBITDA page covers deal size bands and market tiers, and the revenue page carries both the public and private series with the arithmetic that reconciles them.
Run your own numbers
Enter revenue, earnings and growth. You get the SDE multiple, the EBITDA multiple and the discounted cash flow side by side, the comparable sales the range is benchmarked against, and the drivers that explain why your figure sits where it does.