Business Valuation Estimator

Three standard lenses on what a small business is worth: a seller discretionary earnings multiple, an EBITDA multiple, and an asset based floor. Set your own multiples and blend weights, and see how far apart the three methods land. The spread between them usually tells you more than any single number.

Inputs STEP 1

Financials, trailing twelve months

Annual revenue ($) Trailing twelve months gross revenue.

Cost of goods sold ($) Direct costs only.

Operating expenses ($) Excluding owner compensation and one-time items.

Owner salary and benefits ($) Total paid to the owner-operator, added back for SDE.

Owner personal add-backs ($) Discretionary items a buyer would not repeat, such as a personal vehicle.

One-time or non-recurring expenses ($) Legal settlements, a move, a failed product launch.

Depreciation and amortization ($) Non-cash charges, added back for EBITDA.

Interest expense ($) Added back for EBITDA.

Multiples

SDE multiple Typical small-business range is roughly 2.0 to 4.0.

EBITDA multiple Typical lower-middle-market range is roughly 3.5 to 6.5.

Assets and liabilities

Tangible asset fair market value ($) Equipment, vehicles, real property, at realistic resale value.

Inventory at cost ($) Saleable inventory only.

Accounts receivable, collectible ($) Net of expected bad debt.

Total liabilities assumed ($) Debt and payables a buyer would take on.

Blend weights, need not sum to 100

Weight: SDE method (%) The three weights are normalized.

Weight: EBITDA method (%)

Weight: asset method (%)

Discounts

Owner dependence discount (%) Reduction for a business that cannot run without the owner. 0 to 40 is typical.

Customer concentration discount (%) Reduction where a few clients dominate revenue.

Valuation multiples are market conventions, not published rates. A real transaction price depends on deal structure, buyer type, financing, and diligence findings. This is an illustrative estimate for planning, not an appraisal or a fairness opinion.

Blended Estimated Value

Weighted across three methods, after discounts

Estimated Range

Plus or minus 15 percent, a modelling convention

Method Spread

Gap between the widest and narrowest method

Detail

SDE (seller discretionary earnings)--

Value, SDE method--

EBITDA--

Value, EBITDA method--

Asset based value--

Applied discount--

Implied revenue multiple--

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Business ValuationEstimator

Business Valuation
Estimator