Business valuation multiples translate earnings or revenue into an estimated sale price. This calculator applies SDE, EBITDA, and revenue multiples so you can triangulate a realistic range for your business's value — before listing or entering acquisition discussions.
Business Financials
Salary paid to yourself from the business
Earnings Before Interest, Taxes, Depreciation & Amortization
Valuation Range Summary
Estimated Value Range
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Based on industry multiples and business quality tier
Industry Multiple Benchmarks
| Industry | Revenue Multiple | EBITDA Multiple | SDE Multiple |
|---|---|---|---|
| Service Business | 0.5–1.5× | 3–5× | 2–3× |
| Retail / E-commerce | 0.5–2× | 3–5× | 2–3× |
| SaaS / Software | 3–8× | 8–15× | 4–8× |
| Manufacturing | 0.5–1.5× | 4–6× | 2–4× |
| Restaurant / Food | 0.3–0.8× | 2–4× | 1.5–2.5× |
| Healthcare | 1–3× | 5–8× | 3–5× |
| Professional Services | 0.5–1.5× | 3–5× | 2–3× |
How to Value a Small Business
Valuing a small business requires applying industry-standard multiples to your earnings metrics. No single method is definitive — professional buyers use multiple approaches to triangulate a fair price. This calculator shows you three common methods side by side.
Step 1: Enter Your Financial Metrics
Enter annual revenue, net profit before owner salary, owner's actual salary drawn from the business, and EBITDA. If you don't know EBITDA precisely, estimate: take net profit, add back depreciation, amortization, interest, and taxes. For most small businesses, EBITDA will be 15–30% of revenue.
Step 2: Select Industry and Quality Tier
Choose your industry category and honest quality tier. Quality tier has a major impact on multiples: a premium business (recurring revenue, documented systems, no key-person dependency) can command 40–60% more than an average business in the same industry. Be realistic — buyers will discover quality issues during due diligence.
Step 3: Interpret the Valuation Range
The three methods will give different numbers. SDE multiples are most relevant for owner-operated businesses under $2M revenue. EBITDA multiples are preferred by institutional buyers for businesses over $1M profit. Revenue multiples are most useful for SaaS and recurring-revenue businesses. The realistic sale price typically falls between the SDE and EBITDA estimates.
FAQ
Is this business valuation calculator free?
Yes, completely free with no signup required. All calculations run in your browser.
What is SDE in business valuation?
Seller's Discretionary Earnings (SDE) is the total financial benefit a working owner receives from a business, including net profit plus owner's salary plus any personal expenses run through the business. SDE is the most common valuation basis for small businesses under $1M in annual profit. SDE multiples typically range from 2x–4x for Main Street businesses.
What is a typical EBITDA multiple for small businesses?
Small businesses ($1M–$10M EBITDA) typically sell for 3x–6x EBITDA. Businesses with strong recurring revenue, diversified customer bases, and low owner dependency command higher multiples (5x–8x). Businesses with high concentration risk or owner-dependent operations sell at the low end (2x–3x).
How do industry multiples affect business value?
Industry multiples reflect the growth prospects, competitive dynamics, and capital requirements of a sector. SaaS and software businesses sell at 4x–12x revenue. Service businesses sell at 1x–3x revenue. E-commerce at 1x–4x. Manufacturing at 3x–5x EBITDA. Multiples expand during low-interest-rate environments and compress during tightening cycles.
What increases small business valuation?
Key value drivers: recurring revenue streams, diversified customer base (no customer >20% of revenue), documented processes reducing owner dependency, strong EBITDA margins (>20%), year-over-year growth, proprietary products/IP, and clean financials. Businesses that can operate without the owner present command premiums of 20–50%.