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Small Business Valuation Calculator
Built from the same data brokers use — by Kristina Picciotti, who exited her own business to private equity in 2024.
Get a directional estimate of what your business is worth using your annual owner earnings (SDE or EBITDA) and an industry-specific multiple. Three optional quality questions refine where you land inside the range.
Then, once you have a number, we'll show you what the headline valuation leaves out — and why most sellers walk away with only 55–75% of gross valuation after every deduction.
Estimate Your Business Valuation
Enter your annual owner earnings and select your industry. Add the three quality questions below for a more accurate estimate inside your industry's range.
Use SDE for businesses under ~$3M revenue, EBITDA for larger. Not sure? Read about SDE.
Typical SDE multiple range: 2x – 3x
Enter your annual owner earnings above to see your estimated valuation.
Educational tool. Multiples reflect typical ranges for owner-operator small business sales under ~$5M revenue. Your actual valuation depends on dozens of factors beyond industry and earnings. This calculator does not replace a professional valuation or advice from your CPA, attorney, or M&A advisor.
How Small Business Valuation Actually Works
For owner-operator businesses under about $5M in revenue, value is driven by two numbers: an earnings figure (usually Seller's Discretionary Earnings for true small businesses, or EBITDA for larger ones) and a multiple — a number between roughly 2x and 6x+ that reflects what buyers are currently paying for businesses in a given industry.
Multiply earnings by the multiple and you get the gross valuation: the headline asking price. That's the number this calculator gives you.
The multiple isn't a single fixed value — it's a range. Where you fall inside the range depends on the quality of your business: how dependent it is on you personally, whether revenue is recurring or project-based, customer concentration, the state of your financials, and your growth trajectory. The optional quality questions above interpolate your multiple inside the industry range based on three of the most-weighted factors.
For a deeper explanation of how valuation multiples work and what drives them, read Business Valuation Multiples & Net Proceeds.
Frequently Asked Questions
How accurate is this business valuation calculator?
This calculator gives you a directional gross-valuation range based on your earnings and industry multiples typical for owner-operator small businesses under ~$5M revenue. Actual sale prices depend on dozens of factors beyond industry and earnings — customer concentration, owner dependence, financial cleanliness, growth trend, and many more. Use this as a starting point, not a substitute for a professional valuation.
What is the difference between SDE and EBITDA?
SDE (Seller's Discretionary Earnings) is used for owner-operator businesses, typically under $3M in revenue. It includes the owner's salary, benefits, and discretionary expenses as part of total earnings. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is used for larger businesses where the owner is not the operator. Different multiples apply to each. For small businesses, SDE is almost always the right input.
Why is gross valuation different from what I actually walk away with?
Gross valuation is the headline asking price. What you actually keep is net proceeds — gross valuation minus broker commission (typically 8–12% under $2M), legal and CPA fees ($15K–$50K), outstanding debt paid off at close, holdback/escrow amounts (typically 10–15% held 12–18 months), seller notes and earnouts (deferred and at-risk), depreciation recapture taxed at ordinary income rates, and capital gains tax. Most sellers net 55–75% of gross valuation. The full Net Proceeds Calculator inside The Vault models each of these deductions for your specific situation.
What moves my business valuation multiple toward the high end?
Seven factors move a business toward the high end of its industry multiple range: low owner dependence (the business runs without you), more than 60% recurring or contract-based revenue, customer diversification (no single customer over 15–20% of revenue), stable margins at or above industry benchmarks, clean three-to-five-year financial history with documented add-backs, documented processes and SOPs, and consistent revenue and earnings growth over the past two to three years.
What is a valuation multiple in a small business sale?
A valuation multiple is a number applied to SDE or EBITDA to estimate business value. For example, a service business earning $300,000 in SDE with a 3.0x multiple is valued at roughly $900,000. Multiples vary by industry (e.g., 2.0–3.0x for restaurants, 4.0–6.0x+ for SaaS) and shift within each range based on the quality of the business.
Related Reading
- What Is My Business Worth? — How owners and buyers see business value differently, and what factors drive the sale price
- Business Valuation Multiples & Net Proceeds — The 7 factors that move your multiple and the math on what actually hits your bank account
- What Is Seller's Discretionary Earnings (SDE)? — The earnings number that drives your business valuation
- Cleaning Up Financials Before Selling Your Business — Buyers won't pay full value for messy books
- Deal Structure and Taxes When Selling a Business — How two sellers with the same purchase price walk away $200,000 apart
Know the Headline Number. Then Find Out What You Actually Keep.
The Vault includes the full Net Proceeds Calculator — the same model that strips away broker fees, legal costs, debt, holdbacks, depreciation recapture, and capital gains tax to show you what actually lands in your account. Plus 24 other tools across the 5 phases of a business sale.
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