Business Valuation Calculator
Estimate small business and middle-market enterprise market values using SDE multiples, EBITDA valuation, and Discounted Cash Flow (DCF) methods.
Valuation Range: $1,360,000 to $1,920,000
Financial Normalization & Add-Backs
Estimating True Market Value for Mergers, Acquisitions, and Exits
Valuing a private business requires blending financial earnings quality with industry market multiples. For small businesses under $5M in revenue, Seller's Discretionary Earnings (SDE) is the gold standard, adding back owner compensation and discretionary perks. For larger mid-market enterprises ($5M-$50M+), Normalized EBITDA multiples dictate what private equity sponsors and strategic acquirers will pay.
Strategic Business Features
Dual SDE & EBITDA Valuation Engines
Seamlessly toggles between owner-operator SDE multiples (2.0x - 4.5x) and institutional EBITDA multiples (4.0x - 12.0x+).
Discretionary Add-Back Normalization
Accounts for owner salary, non-recurring legal/consulting expenses, personal auto/travel perks, and depreciation.
Industry Multiple Calibration
Preset industry multiples across B2B SaaS (6x-12x+), E-commerce (2.5x-4x), Manufacturing (4x-6x), and Healthcare (5x-8x).
Asset-Based Floor Valuation
Compares cash-flow valuations against net tangible asset liquidation liquidation floors.
Valuation Range Spread
Outputs Low, Mid, and High valuation tiers representing standard deal negotiation corridors.
M&A Teaser Ready Summary
Export structured executive valuation reports suitable for private equity and business brokers.
Executive Use Cases
- ✓Founders Planning an Exit
Establish realistic target selling multiples before hiring an M&A investment banker or business broker.
- ✓Prospective Business Buyers
Perform due diligence sanity checks on business broker listing prices on BizBuySell or Flippa.
- ✓Partner Buyouts & Equity Disputes
Establish a defensible fair-market value (FMV) to execute a partnership buy-sell agreement.
- ✓SBA 7(a) Acquisition Loans
Verify whether a target acquisition can service SBA debt based on historical normalized cash flows.
Frequently Asked Questions
What is the difference between SDE and EBITDA?
Seller's Discretionary Earnings (SDE) adds the single full-time owner's salary and benefits back into net profit, because an incoming buyer will step into that operator role. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) does NOT add back management salaries because an executive manager must be paid to run the business.
What multiple do most small businesses sell for?
Small businesses generating under $1M in SDE typically sell for 2.0x to 3.5x SDE. Companies with recurring revenue, strong management teams, low customer concentration, and proprietary IP can command 4.0x to 6.0x+ SDE or 6.0x to 10.0x+ EBITDA.
What are common add-backs in business valuation?
Standard add-backs include owner salary and bonuses, health insurance, company vehicles used personally, one-time legal settlements, owner family payroll above market rates, and non-operating interest expenses.
How does customer concentration affect business value?
If any single customer accounts for more than 15% to 20% of your total revenue, acquirers view the business as high risk. This can discount the valuation multiple by 20% to 40% or require substantial seller earn-outs.
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