Business Valuation Calculator

A valuation multiple expresses business value as a multiple of a financial metric — most commonly annual revenue, EBITDA (earnings before interest, taxes, depreciation, and amortization), or seller's discretionary earnings (SDE). Multiplying that metric by an industry-typical multiple produces an estimated value range. Multiples vary enormously by industry, growth rate, profitability, and deal size, which is why this calculator applies different default ranges depending on the industry you select.

Revenue multiples (commonly 0.5x-2x for traditional businesses, much higher for high-growth SaaS) value the top line and are most useful for early-stage or high-growth companies not yet consistently profitable. EBITDA multiples (typically 4-10x depending on growth and industry) value normalized operating profit and are standard for established, profitable mid-sized businesses. SDE multiples (typically 2-4x) add back owner salary and discretionary expenses on top of EBITDA-style adjustments, making them the standard valuation approach for small, owner-operated businesses where the owner's compensation is a major expense line.

SaaS and other high-growth, high-margin, recurring-revenue businesses typically command revenue multiples of 5-10x or higher, compared to just 0.5-2x for traditional businesses, because recurring subscription revenue is more predictable, margins are typically higher once scaled, and growth rates are often much faster. Traditional businesses with lower margins, more capital intensity, or less revenue predictability are valued more conservatively relative to their top-line revenue.

Business valuation is inherently imprecise — actual sale prices depend on negotiation, buyer strategic interest, deal structure, market conditions, and dozens of qualitative factors beyond the financial metrics alone. Showing a low-to-high range across multiple valuation methods (and a blended overall range) gives a more honest and useful starting point for negotiation than a single misleadingly precise figure.

Enter whichever figures you have available — the calculator only applies a given method when a non-zero value is entered. Many small business owners track SDE more naturally than EBITDA since it reflects owner compensation directly, while larger or institutionally-run businesses typically report EBITDA. Entering both, where available, produces a more complete picture by showing all applicable methods side by side.

Beyond the base financial multiple, factors that typically push valuation toward the higher end of a range include: consistent or accelerating revenue growth, high customer retention and low customer concentration, recurring or contracted revenue versus one-time sales, documented systems and processes that reduce owner dependency, and a diversified customer base. Factors that push valuation lower include declining revenue, high customer concentration risk, heavy owner dependency, and inconsistent financial record-keeping.

No — this calculator provides a quick, multiple-based estimate useful for early planning, negotiation preparation, or sanity-checking an offer, but it does not replace a formal business valuation performed by a certified valuation analyst, which considers detailed financial statement adjustments, market comparables, discounted cash flow analysis, and asset-based approaches. Use a professional appraisal for actual transactions, estate planning, litigation, or other formal purposes.