How do I estimate what my business is worth?

A quick estimate multiplies earnings by a multiple: adjusted EBITDA for larger companies, seller's discretionary earnings (SDE) for owner-operated ones. A $1 million EBITDA business at 3 to 5 times is a $3 million to $5 million enterprise value. A real valuation weighs income, market, and asset approaches and the specific risks of your company.

What is the difference between enterprise value and what I receive?

Enterprise value is the price for the operating business. What the owners receive is closer to equity value: enterprise value minus debt, plus excess cash, adjusted for working capital, and then reduced by taxes and deal costs. Letters of intent usually quote enterprise value.

What lowers a multiple?

Owner dependence, a few customers making up much of revenue, uneven or unaudited financials, no recurring revenue, and key people without agreements to stay. Fixing those before a sale is operational work that takes years, not weeks.

Where do the multiples in this calculator come from?

They are examples you can change, not market data for your industry or size. Multiples vary widely by industry, size, growth, margins, and the buyer. A business broker, investment banker, or credentialed appraiser can give you a range grounded in actual transactions.

No. It is arithmetic on the figures you enter. It does not replace a formal appraisal or a buyer's diligence.

Free calculators · Business owners

What is my business worth?

A first estimate is earnings times a multiple, then debt out and excess cash in. Enter your numbers to see the range, and how much one turn of the multiple is worth to you.

Enterprise value range

Equity value, low

Equity value, high

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Hypothetical and educational only. Results are estimates from the figures you enter and the rules cited below. They do not account for every factor in your situation, are not a guarantee of any result, and are not tax, legal, or investment advice. The multiples are examples you can change, not market data for any industry. Equity value here is before taxes, deal costs, and working capital adjustments.

Why the multiple matters more than the formula

Two companies with the same earnings can sell at very different multiples. Buyers pay more for businesses that run without the owner, have no single customer they cannot lose, show clean and consistent financials, and earn some revenue that repeats. Every one of those can be improved before a sale, but not quickly.

Taxes and deal structure decide how much of the price you keep. An asset sale and a stock sale can produce very different after-tax results on the same headline price; the business sale calculator shows what you keep after debt, costs, and taxes. For the full method, see how to value a closely held business before a sale, the free Exit Readiness Scorecard, and the book Before You Sell.

Questions owners ask

How do I estimate what my business is worth?: A quick estimate multiplies earnings by a multiple: adjusted EBITDA for larger companies, seller's discretionary earnings (SDE) for owner-operated ones. A $1 million EBITDA business at 3 to 5 times is a $3 million to $5 million enterprise value. A real valuation weighs income, market, and asset approaches and the specific risks of your company.
What is the difference between enterprise value and what I receive?: Enterprise value is the price for the operating business. What the owners receive is closer to equity value: enterprise value minus debt, plus excess cash, adjusted for working capital, and then reduced by taxes and deal costs. Letters of intent usually quote enterprise value.
What lowers a multiple?: Owner dependence, a few customers making up much of revenue, uneven or unaudited financials, no recurring revenue, and key people without agreements to stay. Fixing those before a sale is operational work that takes years, not weeks.
Where do the multiples in this calculator come from?: They are examples you can change, not market data for your industry or size. Multiples vary widely by industry, size, growth, margins, and the buyer. A business broker, investment banker, or credentialed appraiser can give you a range grounded in actual transactions.
Is this a valuation?: No. It is arithmetic on the figures you enter. It does not replace a formal appraisal or a buyer's diligence.

Sources

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