Simple Valuation Calculator
I've made business valuation dead simple. No complex formulas. No financial jargon. Just three easy steps to find out what your business is actually worth.
Simple Valuation Calculator
I've made valuation as simple as possible. Just enter your financials and I'll estimate what your business is worth.
Use SDE for small businesses, EBITDA for larger ones
What percentage do you expect to grow each year? (0-20% typical)
Quick Tips:
- • Be conservative with growth rate estimates
- • Use your average profit from the last 3 years, not just the best year
- • Add back your salary and personal expenses to get SDE
- • This calculator works best for businesses with $50K-$5M in annual profit
Simple Valuation Calculator in 3 Simple Steps
I know what you're thinking: "Valuation sounds complicated." But here's the truth—it doesn't have to be. I've stripped away all the complexity and distilled it down to three dead-simple steps.
Enter Your Financials
Just type in your annual revenue and profit. That's it. I'll guide you on whether to use SDE (if you're a small business) or EBITDA (if you're bigger). No digging through 10 years of financial statements needed.
Pro tip: Use your average profit from the last 3 years, not just your best year ever. Be honest with yourself—this number is only as good as what you put in.
Add Your Growth Rate
How fast are you growing? This is where the magic happens. Higher growth = higher multiple. A stable business growing 5% annually is worth less than one growing 20% annually. Simple as that.
Real talk: Don't be the hero who inputs 50% growth. Be conservative. Most businesses plateau. I'd rather you be pleasantly surprised than disappointed.
Get Your Valuation
Boom—instant results. I'll show you your estimated business value based on a profit multiple that scales with your growth rate. Use this number to start planning, negotiating, or just feeling good about what you've built.
Remember: This is a ballpark figure, not a certified appraisal. But it's enough to start conversations with investors, buyers, or just to give yourself a well-deserved pat on the back.
Why I Built This Simple Calculator
Look, I've been through the business valuation gauntlet. Spreadsheets, complex formulas, consultants charging $10,000 for a report that might as well be written in ancient Greek. It's ridiculous.
Most small business owners just want to know: "What's my business worth?" Not a 50-page PDF with sensitivity analyses and Monte Carlo simulations. Just a reasonable estimate they can use to make decisions.
So I built the calculator I wished I had years ago. Something simple. Something fast. Something that gives you a real answer without requiring an MBA to understand.
The Secret Formula Behind the Calculator
Okay, here's the not-so-secret formula I'm using:
Business Value = Annual Profit × Multiple
The multiple starts at 2x (for businesses with no growth) and goes up to 6x (for businesses growing 20%+ annually). Here's how it breaks down:
- 🔵2x Multiple: 0-5% growth. Stable, mature business. You're not growing, but you're not dying either.
- 🟢3x Multiple: 5-10% growth. Healthy business. You're growing steadily and have room to run.
- 🟡4x Multiple: 10-15% growth. Strong growth. Buyers see real potential here.
- 🔴5x-6x Multiple: 15-20%+ growth. Rocket ship. This is the kind of growth that gets investors excited.
SDE vs. EBITDA: The Confusing Part Made Simple
One of the biggest questions I get is: "Which profit number should I use?" Let me break it down in plain English:
SDE (Seller's Discretionary Earnings)
Best for: Businesses under $2M in revenue
This is your net profit PLUS your salary, personal benefits, car expenses, and any one-time expenses. It shows the total cash flow available to an owner-operator. Most small businesses use this.
EBITDA
Best for: Businesses over $2M in revenue
Earnings Before Interest, Taxes, Depreciation, and Amortization. This is what professional buyers and private equity firms use. It's more standardized and doesn't include your personal perks.
How to Make Your Business Worth More
Now that you know your number, let me tell you something important: you can increase it.
Most business owners focus only on increasing profit. That's hard. But there's an easier lever: increase your multiple.
How do you do that? Here are the things that actually move the needle:
- 💪Make yourself replaceable: If your business falls apart without you, it's worth less. Build systems, hire managers, document processes. The less it needs you, the more someone else will pay for it.
- 📈Show consistent growth: Buyers pay more for predictable growth than volatile spikes. Three years of 15% growth beats one year of 50% growth followed by a crash.
- 🔄Recurring revenue is king: Subscription models, service contracts, maintenance plans. Revenue that automatically renews is worth 2-3x more than one-time sales.
- 👥Diversified customer base: If one customer is 50% of your revenue, that's a risk. Spread it out. Ten customers each at 10% is safer and more valuable than one at 50%.
What This Calculator CAN and CAN'T Do
Let me be straight with you about what this tool is good for:
✅ What It CAN Do:
- • Give you a quick ballpark estimate in under 60 seconds
- • Help you understand how growth affects valuation
- • Start conversations with investors or buyers
- • Track your progress as you build value over time
- • Provide a reality check on whether your expectations are reasonable
❌ What It CAN'T Do:
- • Replace a professional valuation (for legal disputes, bank loans, etc.)
- • Account for industry-specific factors
- • Factor in your location, competition, or market conditions
- • Value complex businesses with multiple revenue streams
- • Give you a guaranteed selling price
Real Examples: How Much Are Businesses Actually Selling For?
I know sometimes it helps to see real numbers. Here are some actual business sales (names changed for privacy) to give you context:
Example 1: HVAC Company
Revenue: $1.2M | Profit (SDE): $350K | Growth: 8% annually
Sold for: $1.05M (3x SDE multiple)
Why this multiple? Solid business with recurring service contracts, but owner was still involved in daily operations.
Example 2: Marketing Agency
Revenue: $2.8M | Profit (EBITDA): $420K | Growth: 22% annually
Sold for: $2.1M (5x EBITDA multiple)
Why this multiple? High growth, strong recurring revenue from retainers, management team in place (not founder-dependent).
Example 3: E-commerce Store
Revenue: $850K | Profit (SDE): $180K | Growth: 3% annually
Sold for: $360K (2x SDE multiple)
Why this multiple? Low growth, highly dependent on paid ads, and seller was doing 80% of the work. Good business, but not scalable without new owner.
Frequently Asked Questions
How accurate is this simple valuation calculator?
Let me be honest: it's accurate enough for planning and conversations, but not accurate enough for a bank loan or legal dispute. This calculator gives you a realistic range based on profit multiples that small businesses actually sell for. For a certified valuation that'll hold up in court or with the IRS, hire a professional business appraiser. They'll charge $5K-$15K and give you a 50-page report.
What if my business lost money last year?
If you're losing money, this calculator won't be helpful. Businesses with negative profits are valued differently—usually based on assets, potential turnaround, or strategic value to a specific buyer. If you're in this situation, you probably need a professional valuation or you're looking at an asset sale rather than a business sale.
Should I use revenue or profit for valuation?
Always profit. Revenue multiples are rare and mostly used for high-growth SaaS companies. For 95% of businesses (restaurants, agencies, retail, service businesses, etc.), buyers care about cash flow, not top-line revenue. I can have $10M in revenue and still be worthless if I'm spending $11M to generate it. Profit is what you can put in your pocket. That's what buyers pay for.
How long does it actually take to sell a business?
On average, 6-12 months. Seriously. It's not like selling a house. You need to prepare documentation, find buyers, negotiate, do due diligence (they'll go through your financials with a fine-tooth comb), negotiate again, and then close. The businesses that sell fastest? The ones with clean financials, consistent growth, and an owner who's not essential to daily operations. Use this calculator to set your price, but start planning at least a year before you actually want to exit.
What's the difference between this and a professional valuation?
A professional valuation considers everything: your location, industry trends, competition, management team, customer concentration, asset quality, market conditions, and more. They'll use three different valuation methods, do a detailed financial analysis, and provide a defensible report. This calculator? It gives you a quick estimate based on profit and growth. It's the difference between checking WebMD for a headache versus getting a full MRI from a neurologist. Sometimes you need the former, sometimes you need the latter.
Can I sell my business for more than this estimate?
Absolutely. This is a baseline. Strategic buyers (competitors, complementary businesses, etc.) often pay a premium. I've seen businesses sell for 2-3x my estimate because the buyer wanted their customer list, their technology, or their team. On the flip side, I've also seen businesses sell for less because of hidden issues, poor documentation, or a rushed sale. Use this as a starting point for negotiations, not a ceiling or floor.
Does inventory get included in the valuation?
Great question. Most small business sales are 'inventory plus'—meaning the buyer pays the valuation (from this calculator) PLUS the cost value of inventory on hand. So if I calculate your business is worth $500K and you have $100K in inventory, a buyer would pay $600K total. Some industries (like manufacturing) include inventory in the base valuation, but for retail, wholesale, and e-commerce, it's usually added on top.
What about debts and loans?
Most small business sales are 'cash-free, debt-free.' You pay off the business debts at closing, and you keep the cash in the business bank account. The buyer gets the assets free and clear. There are exceptions (SBA loans can sometimes be assumed by buyers), but that's the general rule. If you have significant debt, it'll affect what you walk away with, even if it doesn't affect the business valuation itself.
I'm just curious—how often should I check my business valuation?
I recommend checking annually, maybe when you're doing your taxes. Run this calculator, write down the number, and track it over time. It's motivating to see your value increase as you grow. If you're seriously considering selling in the next 2-3 years, check quarterly and start working on the things that increase your multiple (making yourself replaceable, diversifying customers, etc.).
What if I don't have formal financial statements?
You need them. Seriously. Buyers will ask for tax returns, P&L statements, balance sheets, and bank statements. If you don't have clean financials, you'll get a lower valuation or no offers at all. If you've been running your business casually, invest in bookkeeping before you try to sell. It'll pay for itself many times over in a higher sale price.
Does this work for startups?
Not really. Startups (especially pre-revenue) are valued completely differently—usually based on potential market size, team quality, intellectual property, and comparable funding rounds in the industry. If you're a tech startup raising VC money, you need a startup valuation calculator (I have one of those too). If you're a small, profitable business, you're in the right place.
How do I increase my business value before selling?
I'm glad you asked! Start 2-3 years before you want to sell. (1) Clean up your financials—professional bookkeeping is non-negotiable. (2) Make yourself replaceable—document everything, hire managers, step back from daily operations. (3) Diversify your customers—no single customer should be more than 15-20% of revenue. (4) Show consistent growth— Buyers hate volatility. (5) Add recurring revenue wherever possible—subscriptions, service contracts, maintenance plans. Do this and you can easily increase your multiple from 2x to 4x, which doubles your sale price.
Ready to Know Your Number?
Whether you're thinking of selling, bringing on investors, or just curious—this calculator gives you the answer in under 60 seconds. No MBA required.
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