AI agents for SMEs - now running in production. See how the pilot works →

Business Valuation Calculator

Value a small business four ways — SDE multiple, EBITDA multiple, revenue multiple and discounted cash flow — with the asset-based floor, a valuation range, implied margins and the buyer’s payback period.

✅ Figures verified. Valuation methods (SDE and EBITDA multiples, discounted cash flow, asset-based) follow standard practice; the typical multiple ranges shown are market observations, not official figures. Checked 8 October 2026.
$0
Seller’s discretionary earnings (SDE)—
Adjusted EBITDA—
SDE multiple method—
EBITDA multiple method—
Revenue multiple method—
Discounted cash flow (5 years + terminal)—
Asset-based floor—
Valuation range—
Implied margins—
Buyer’s payback at the midpoint—

In short

Small businesses are usually valued at a multiple of seller's discretionary earnings (profit plus the owner's compensation and add-backs) — typically 2–3.5× for owner-operated businesses — or 4–7× EBITDA for companies with a management team, cross-checked against a revenue multiple, a discounted cash flow at a 20–30% discount rate and the net value of tangible assets as a floor. Buyers using SBA financing need the cash flow to cover the loan at about 1.25×.

Who this is for: US business owners preparing to sell, buyers evaluating a listing, and partners settling a buyout.

Not tax or legal advice. Indicative only — not an appraisal. Real transaction values depend on due diligence, deal structure, financing and buyer competition.
Ad space — insert AdSense unit here after approval

How small businesses are valued

  • SDE × multiple: seller's discretionary earnings = profit + one owner's full compensation + non-cash and one-time costs + personal expenses. Most Main-Street sales (under $2–3 million) price at 2–3.5× SDE.
  • EBITDA × multiple: for businesses with a management team; deduct a market salary for the owner's role first. Lower-middle-market deals price at 4–7× EBITDA, more for recurring revenue.
  • Revenue multiples are quick checks (0.3–0.6× for low-margin retail, 1–3× for agencies, 3–10× for SaaS) but ignore profitability.
  • DCF discounts projected cash flows at 20–30% for small private companies — useful for growth businesses, sensitive to assumptions.
  • Asset-based value is the floor: what the equipment, inventory and receivables would fetch, less liabilities.
  • Buyers test any price against financing: SBA lenders want the cash flow to cover the loan payment 1.15–1.25× after paying a manager.

See also: SBA 7(a) Loan Calculator 2026, Break-Even Calculator.

Sources: standard valuation methodology (SDE / EBITDA multiples, DCF, asset approach); multiple ranges are market observations from business-brokerage data. Checked 8 October 2026.

Assumptions

  • SDE = net profit + owner salary + add-backs; EBITDA = SDE − market salary.
  • Values = SDE × multiple, EBITDA × multiple, revenue × multiple; DCF discounts 5 years of EBITDA growing at the entered rate plus a Gordon terminal value.
  • Indicative value = midpoint of the SDE and EBITDA methods; asset floor = assets − liabilities.

Worked example

$1.2M revenue, $150,000 net profit, $90,000 owner salary, $25,000 add-backs, $80,000 replacement salary, 2.8× SDE, 4.5× EBITDA, 0.8× revenue, $120,000 assets, $40,000 liabilities, 3% growth, 25% discount

SDE = 150,000 + 90,000 + 25,000 = $265,000 (22% of revenue); EBITDA $185,000. SDE method: 2.8 × $265,000 = $742,000. EBITDA method: 4.5 × $185,000 = $832,500. Revenue check: $960,000. DCF at 25% / 3%: about $866,000. Asset floor $80,000. Indicative value (midpoint of SDE and EBITDA) about $787,000 — a buyer recovers it in roughly 3 years of SDE.

Frequently asked questions

What is a typical multiple for a small business?

2–3.5× seller's discretionary earnings for owner-operated businesses; 4–7× EBITDA once there is a management team and over $1 million of EBITDA.

What are add-backs?

Expenses a new owner would not incur: the owner's salary and perks, family on payroll, one-time legal or moving costs, depreciation, interest and personal items run through the business.

How do I increase the value of my business?

Reduce owner dependence, document processes, diversify customers, build recurring revenue, clean up the books for three years and show growth.

Is inventory included in the price?

Usually quoted separately at cost for retail and distribution; for service businesses it is immaterial. Working capital is negotiated in the purchase agreement.

What multiple does a restaurant sell for?

Typically 1.5–2.5× SDE or 0.3–0.5× revenue; well-run concepts with multiple units reach 3× or more.

How is a SaaS or online business valued?

By revenue or ARR multiples (2–8× ARR depending on growth and churn) rather than SDE, because profits are reinvested.

Ad space — insert AdSense unit here after approval

Related calculators

United States — same topic

RMD Calculator 2026 — Required Minimum DistributionYour 2026 required minimum distribution from the IRS Uniform Lifetime Table, the percentage of the balance, deadline, 25% penalty, tax estimate, starting age by birth year and a 15-year projection. Table confirmed against 26 CFR 1.401(a)(9)-9.Roth vs Traditional IRA Calculator 2026Roth vs traditional IRA on equal pre-tax dollars for 2026 — balance at retirement for each, the invested tax saving, the break-even retirement tax rate and a verdict, with the $7,500 / $8,600 limits confirmed on irs.gov.Child Tax Credit Calculator 2026Your 2026 child tax credit: $2,200 per child under 17 and $500 for other dependants, the refundable portion (up to $1,700, 15% of earned income over $2,500), the $200,000 / $400,000 phase-out and how much actually reduces your tax — figures confirmed against Rev. Proc. 2025-32.

Same topic in other countries

Pakistan Car Loan / EMI CalculatorCalculate your monthly car loan installment in Pakistan, for conventional bank financing or Islamic (profit-rate) financing.UAE Car Loan Calculator — Flat vs Reducing RateUAE car loan calculator: monthly instalment, total interest and the real APR of a flat-rate offer compared with reducing balance — for Dubai and Abu Dhabi bank car loans.Gold Zakat Calculator (Per Tola) — PakistanWork out zakat due on gold held in tola or grams, using the 7.5-tola nisab threshold and today's gold price.

See all United States calculators → · All free online calculators

Written by the Swift IT Sols editorial team · SWIFT SOLSRules sourced from the official authorities named on this page and last checked How we source and check calculators

Found an error? Report it — tell us the inputs, the result you got, what you expected and the rule or source. Confirmed corrections are published within a week.

Start here

Ready to build your next digital solution?

Send the brief and you get a scoped response with approach, milestones and a fixed price range. Not a sales call.

Book consultation Request proposal Or see one running first
1

A 30-minute call with the engineer who would run your project

Within 2 business days
2

A written scope: approach, module breakdown, milestones, fixed price range

Within 5 business days
3

You decide. No retainer, no obligation, and the scope document is yours to keep either way

Your timeline

Send your brief

Three fields to start. Add project details if you have them.

A real person replies, usually within one business day. Your details are stored on this site only and are never sold or shared.

Book a consultation