How is a business valuation calculated? Your questions, answered

A business valuation estimates what a company is worth using several methods and reconciling them into a range. Businessappraisal applies three: a revenue multiple (value as a multiple of revenue), an EBITDA or SDE multiple (value as a multiple of earnings), and a discounted cash flow (the present value of projected future cash). It then benchmarks the result against how comparable businesses at similar scale have recently sold. When the methods agree, the range is tight. When they diverge, you see which assumption is driving the gap. The result is an educational estimate, not a certified appraisal.

An instant valuation is an educated estimate, not a precise number, which is why Businessappraisal shows a low to high range rather than a single figure. The estimate is only as good as the numbers you enter and the assumptions behind each method, and the actual sale price always depends on the buyer, the deal terms, and diligence. It is an accurate way to understand roughly what your business is worth and why, before you commission a formal valuation. It is not a substitute for a certified appraisal.

No. Businessappraisal provides an educational estimate for informational purposes only. It is not a certified appraisal, a USPAP-compliant valuation, a fairness opinion, or financial, investment, tax, or legal advice. For a formal valuation, such as for tax, ESOP, SBA lending, litigation, divorce, or a 409A, you should engage a credentialed appraiser (ABV, CVA, or ASA). We are the decision-support layer you use before that, to understand what your business is likely worth and why.

At a minimum, your annual revenue and either EBITDA or seller discretionary earnings (SDE). Adding your growth rate, industry, and business model produces a tighter, better-benchmarked range. You do not upload tax returns, connect your accounting software, or share sensitive documents. You enter a few numbers and Businessappraisal does the rest.

Yes. Businessappraisal is built to be private. The figures you enter to run a valuation are used to produce your estimate and are not sold or shared, and the interactive tool on the site does not store the numbers you try. We only email you about your estimate. See the privacy policy for the full detail.

Businessappraisal works for most privately held small and mid-sized businesses, including SaaS and software, ecommerce and DTC brands, agencies and professional services, restaurants and multi-unit operators, and other owner-operated companies. It chooses the methods and comparable sets that fit your model, for example an SDE multiple for a main-street business and a revenue multiple for a high-growth SaaS company.

The methods are weighted by what fits your business. A high-growth SaaS company leans on the revenue multiple and DCF, because earnings may be reinvested into growth. A profitable main-street business leans on the SDE or EBITDA multiple, because a buyer is buying the earnings. Comparable sales anchor all of them to the real market. Businessappraisal shows each method and its weight so you can see the reasoning, not just the result.

Most free calculators multiply a single number and then hand your email to a broker. They are lead-generation, not a tool. Businessappraisal triangulates three methods, shows the comparable sales behind the multiple, and explains the drivers in plain English, so the tool itself is the product. It is built to help you understand your business, not to route you into a sales pipeline.

Transparent self-serve pricing. Starter is 29 dollars per month, Pro is 59 dollars per month and is the most popular tier, Business is 149 dollars per month, and Enterprise is custom. Prices are billed yearly by default. There is no permanent free plan, though you can try the interactive valuation on the site before you sign up.

Yes. Plans are month to month by default and you can cancel anytime. There is no long-term contract on the self-serve tiers, and Enterprise terms are agreed up front.