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Business Valuation Calculator

Get a fast estimate of what your business might be worth using three widely used methods — earnings multiple, revenue multiple, and asset-based valuation — side by side.

3
Valuation Methods
Instant
Live Estimate
100%
Free

Why Use This Business Valuation Calculator?

  • ✓ Compares three valuation methods instead of relying on just one number.
  • ✓ Useful for funding conversations, buy-outs, or a first gut-check before hiring a valuation expert.
  • ✓ Shows a blended average alongside each individual method.
  • ✓ No account needed — just enter your numbers.

On This Page

Business Valuation Calculator Formula Quick Reference Key Terms Explained Where It's Used Worked Examples Tips & Mistakes FAQs

Business Valuation Calculator

Converts your entered amounts between currencies at an approximate exchange rate.
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Trailing twelve months revenue.
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Owner earnings or EBITDA for the year.
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Cash, equipment, inventory, property.
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Loans, credit lines, outstanding debts.
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Typical small business range: 2x–5x SDE.
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Typical range: 0.5x–3x annual revenue.

About Business Valuation Calculator

Business valuation estimates what a company is worth to a buyer, investor or lender. No single method is perfect — earnings multiples reward profitability, revenue multiples suit high-growth or pre-profit companies, and asset-based valuation is the floor value if the business stopped operating today.

Results

Earnings Multiple Method
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Revenue Multiple Method
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Asset-Based Method
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Blended Average Estimate
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Summary

Enter values to see your results.

Business Valuation Calculator Formula

Earnings Multiple Method

Valuation = Annual Net Profit (SDE/EBITDA) × Earnings Multiple

Revenue Multiple Method

Valuation = Annual Revenue × Revenue Multiple

Asset-Based Method

Valuation = Total Assets − Total Liabilities

Blended Estimate

Average of all three methods gives a sanity-checked range rather than one single number.

Quick Reference

Business TypeTypical Earnings Multiple*
Local service business (SDE-based)1.5x – 3x
Established small business w/ staff2.5x – 4x
E-commerce brand2.5x – 4.5x
SaaS / recurring revenue software3x – 6x ARR
Agency / consultancy1x – 3x

What Moves the Multiple Up

  • Recurring or contracted revenue.
  • Low owner dependency (business runs without you).
  • Growth trend and diversified customer base.

*Ranges Are Directional Only

  • Actual multiples vary heavily by industry, size, growth and buyer demand.
  • A professional valuation or M&A advisor should be used for real transactions.
  • Use this as a starting conversation, not a final price.

Key Terms Explained

Three common ways to estimate what a business is worth, each answering a slightly different question.

📈 Earnings Multiple (SDE/EBITDA)

  • Values the business based on the profit it generates for an owner.
  • Most common method for small, owner-operated businesses.
  • Multiple reflects risk, growth and owner dependency.

💵 Revenue Multiple

  • Values the business as a multiple of top-line sales.
  • Common for high-growth or pre-profit companies (e.g. early SaaS).
  • Less sensitive to short-term cost swings than earnings multiples.

🏢 Asset-Based Valuation

  • Values the business as assets minus liabilities — its liquidation floor.
  • Useful for asset-heavy businesses (real estate, equipment, inventory).
  • Usually the lowest of the three estimates for a healthy operating business.

⚖️ Why Use All Three

  • A single method can be misleading in isolation.
  • Comparing all three shows a realistic range rather than a false-precision number.
  • Buyers and investors typically triangulate using more than one method too.

Where Business Valuation Is Used

💰 Raising Investment

Give investors a defensible starting point before negotiating equity and terms.

🤝 Selling Your Business

Sanity-check a broker's asking price or prepare for buyer due diligence.

🧾 Buy-Side Due Diligence

Estimate a fair offer range before making a formal bid on a business.

📋 Partnership Buy-Outs

Estimate a fair buy-out price when a co-founder or partner is exiting.

🏦 Loan & Collateral Discussions

Support conversations with lenders who want to understand asset coverage.

📊 Annual Planning

Track how your estimated valuation trends year over year as the business grows.

Worked Examples

Example 1 — Local Service Business

Revenue $500,000, Net Profit $90,000, Assets $220,000, Liabilities $60,000, Earnings Multiple 3x, Revenue Multiple 1.2x → Earnings method $270,000, Revenue method $600,000, Asset method $160,000, Blended average ≈$343,000.

Example 2 — Early SaaS Company

Revenue $300,000, Net Profit $20,000 (near break-even), Assets $50,000, Liabilities $10,000, Earnings Multiple 4x, Revenue Multiple 3x → Revenue method dominates at $900,000, showing why growth companies lean on revenue multiples.

Example 3 — Asset-Heavy Business

Revenue $1,200,000, Net Profit $150,000, Assets $800,000, Liabilities $300,000, Earnings Multiple 2.5x → Asset method $500,000 may exceed the earnings method, setting a higher valuation floor.

Best Practices & Common Mistakes

✅ Best Practices

  • Use all three methods and look at the range, not a single number.
  • Pull your multiple from recent comparable sales in your specific industry.
  • Normalize profit for one-off costs and owner perks before applying a multiple.
  • Revisit your valuation estimate at least annually as revenue and profit change.
  • Get a professional valuation before any real transaction — this is a planning estimate.

❌ Common Mistakes

  • Applying a SaaS-style multiple to a low-margin local business, or vice versa.
  • Forgetting to subtract liabilities in the asset-based method.
  • Using gross revenue instead of profit for the earnings method.
  • Treating the blended average as a guaranteed sale price.
  • Ignoring how owner-dependent the business is, which strongly affects real-world multiples.

Frequently Asked Questions

There isn't one "most accurate" method — professional valuations typically blend earnings, revenue and asset-based approaches, then adjust for industry and risk factors.
It varies widely. Service businesses often use 1.5x–3x SDE, while SaaS companies can command 3x–6x annual recurring revenue. Research recent sales in your specific industry for a realistic number.
SDE (Seller's Discretionary Earnings) adds back the owner's salary and is common for small owner-operated businesses. EBITDA excludes owner salary and is more common for larger companies with management teams.
No. This calculator gives a fast planning estimate. For a sale, fundraising round, or legal matter, use a certified business valuation professional.
That's normal for a healthy, profitable business — asset value is usually a floor, since the business is worth more as a going concern than its assets alone.
Annually is typical, or whenever there's a major change in revenue, profit, assets or industry conditions.

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