Business Valuation Calculator
This is a rough range, not an appraisal. Real prices depend on growth, customer concentration, owner dependence, assets, debt and deal terms.
How the business valuation calculation works
Pick the right earnings measure
Owner-run businesses are usually priced on SDE: pre-tax profit plus the owner's pay, interest, depreciation and one-off costs. Larger businesses use EBITDA.
Choose a low and a high multiple
Multiples come from sales of similar businesses. Use a range, because two firms with the same earnings can sell for very different prices.
Multiply earnings by each multiple
$250,000 SDE × 2.5 = $625,000 and × 3.5 = $875,000. The value sits somewhere in that band.
Treat it as a starting point
A broker, appraiser or accountant will adjust for growth, risk, assets, debt and deal terms. Get a formal valuation for a sale, loan or legal matter.
Worked example. A business with $250,000 of SDE and a 2.5× to 3.5× multiple range is roughly worth $625,000 to $875,000, with a midpoint of $750,000.
Business Valuation FAQ
How do you value a small business?
A common quick method is earnings × a multiple: SDE for owner-run firms, EBITDA for larger ones. Formal valuations also look at assets and discounted future cash flow.
What is SDE?
Seller's discretionary earnings: pre-tax profit plus the owner's salary and perks, interest, depreciation, amortization and one-off expenses. It shows what one full-time owner would earn.
How much is my business worth?
Roughly, your yearly SDE or EBITDA times the multiple that buyers pay for similar businesses. With $250,000 of SDE and a 2.5× to 3.5× range, that is $625,000 to $875,000. The multiples here are your assumption; the real price comes from what a buyer will pay.
What is the business valuation formula?
Value = earnings × multiple. Earnings are SDE for an owner-run business or EBITDA for a larger one. Run it with a low and a high multiple to get a range, then adjust for debt, cash and assets that come with the sale.
What multiple should I use?
Look at recent sales of similar businesses through a broker or industry data. Multiples rise with size, growth and steady recurring revenue, and fall when the business depends on the owner.
What are EBITDA multiples by industry?
NYU Stern (Damodaran) publishes EV/EBITDA by sector for US listed companies with positive EBITDA. January 2026 figures: Business and Consumer Services 14.26×, Engineering/Construction 17.18×, Restaurant/Dining 17.49×, Trucking 10.41×, Homebuilding 8.92×, all-market 19.73×. These are large public firms; small private businesses usually sell for much lower multiples.
Can I value a business based on revenue?
Some industries quote revenue multiples, but earnings multiples are more reliable because two firms with the same sales can have very different profits.
What is the difference between SDE and EBITDA?
EBITDA counts a market salary for the manager as a cost. SDE adds back one owner's full pay and perks, so SDE is higher for the same business, and SDE multiples are lower than EBITDA multiples.
Is this result an appraisal?
No. It is a rough range for planning. For a sale, SBA loan, divorce or estate, get a valuation from a qualified appraiser.
Sources: NYU Stern (Damodaran): Enterprise value multiples by sector, US, January 2026