Calculateus

Business Valuation Multiple Calculator

Estimate a small business's valuation using a revenue or earnings multiple.

Result

Estimated Valuation
$625,000

This is a rough, single-multiple estimate - real valuations also weigh growth trends, customer concentration, owner dependency, and recurring vs. one-time revenue. Always get a professional valuation for an actual transaction.

About the Valuation Multiple Calculator

The Business Valuation Multiple Calculator produces a quick estimate of what a small business might be worth by multiplying a base financial metric - annual revenue, Seller's Discretionary Earnings (SDE), or EBITDA - by an industry-typical multiple. It's built for owners, buyers, and brokers who want a fast ballpark figure before commissioning a formal appraisal, not a substitute for one.

How It Works

You pick a base metric (revenue, SDE, or EBITDA), enter its dollar value, and enter the multiple you believe applies to your industry and business size. The calculator multiplies the two numbers directly to produce an estimated valuation, with no other adjustments applied. A default multiple of 2.5x is pre-filled as a reasonable small-business SDE starting point, since the tool itself notes that small businesses commonly sell in the 2-4x SDE range, though this varies enormously by industry.

Estimated Valuation = Metric Value x Industry Multiple

Formula & Methodology

There's no hidden math here beyond one multiplication. The real work happens before you use the calculator: choosing the correct base metric for your situation, and sourcing a defensible multiple. SDE is the standard metric for owner-operated businesses because it adds back the owner's salary and personal benefits to profit, reflecting what a new owner-operator could actually take home. EBITDA is more common for larger businesses with a professional management team already in place, where the current owner's personal compensation isn't central to the deal.

Examples

Owner-operated retail shop

A shop owner enters $250,000 in SDE with a 2.5x multiple, the calculator's own default values, and gets an estimated valuation of $625,000.

Revenue-based estimate for a services firm

A consulting firm with $900,000 in annual revenue and a conservative 0.8x revenue multiple for the industry would see an estimated valuation of $720,000.

Advantages

  • Gives owners and prospective buyers a fast, transparent starting number before paying for a formal business appraisal.
  • Lets you toggle between revenue, SDE, and EBITDA as the base metric, matching the convention most commonly used for the size and structure of your business.
  • Makes it easy to see how sensitive the estimate is to the multiple assumption by testing different multiples side by side.

Common Mistakes

  • Applying an SDE-appropriate multiple (2-4x) to a revenue figure, which produces a number many times too high since revenue multiples are typically well under 1x.
  • Treating the single output as a final asking or offer price rather than a rough starting point for negotiation and further diligence.
  • Using a generic or outdated industry multiple pulled from an unrelated business type instead of one sourced for your specific industry and business size.

Edge Cases to Watch For

  • The calculator does not validate that the multiple is reasonable for the chosen metric type - entering an EBITDA-sized multiple against a revenue figure will wildly overstate value, since revenue multiples and EBITDA multiples operate on completely different scales.
  • A zero or negative metric value simply produces a zero or negative valuation since there is no floor or error check on the metric input, unlike some of the calculator's neighbors that reject non-positive inputs.
  • The output is a single-point estimate with no range, and as the tool itself notes, it ignores factors like growth trends, customer concentration, owner dependency, and how much revenue is recurring versus one-time, all of which move real-world multiples up or down.

Common Use Cases

  • Small business owners doing early, informal thinking about what their business might fetch on the market.
  • Prospective buyers screening multiple acquisition targets quickly before committing time to formal due diligence.
  • Brokers and advisors sanity-checking a client's expectations against typical industry multiples before a listing conversation.
Written & fact-checked by the Calculateus TeamLast updated August 5, 2026How we verify our formulas

Frequently asked questions

What's the difference between SDE and EBITDA?

Seller's Discretionary Earnings adds back the owner's salary and personal benefits to profit, commonly used for valuing small, owner-operated businesses being sold to another individual owner-operator. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is more standard for larger businesses with professional management, where an owner's personal salary isn't as central to the deal.

Related calculators

Customer Lifetime Value (CLV) CalculatorEstimate how much revenue and profit an average customer generates over their entire relationship with your business.Customer Acquisition Cost (CAC) CalculatorCalculate how much your business spends, on average, to acquire a single new customer.E-Commerce Profit CalculatorCalculate true net profit per sale after product cost, platform fees, payment processing, and shipping.Conversion Rate CalculatorCalculate the percentage of visitors who complete a desired action, like a purchase or signup.

Conclusion

This calculator turns one metric and one multiple into a single valuation estimate, useful for early-stage thinking but not a replacement for a professional appraisal. Because the result is only as sound as the multiple you supply, treat it as a starting point for discussion rather than a number to rely on in an actual transaction.