Calculate Your Business's Value

To help illustrate how a market multiple valuation works, the calculator below will return a valuation range based on business earnings and the average market valuation multiples of businesses in the same industry.

How This Calculator Works

This simple business valuation calculator works by applying a valuation multiple range to your business's average annual cash flow. Cash flow refers to the total financial benefit a business produces for its owner(s). In this case, we use Sellers Discretionary Earnings (SDE), which takes into account the net income of the business as well as any additional compensation or financial benefits the owner receives from the business.

The multiples used in the calculation are high and low averages for the given industry. The range for some industries is fairly narrow, while others may have a wide spread. Once you have calculated the initial range, you will want to look at the table of average valuation multiples and find the business category that most closely aligns with the business being evaluated. This will help narrow the pricing range and give you an idea of what the business might sell for on the open market. Keep in mind, many factors affect the value of a business, and the market average is only a starting point.

To understand the factors that will affect valuation and sale price of a business, see Selling Your Business: Circumstances That Impact Valuation.

For an overview of business valuation and the other methods used, see How to Value a Business for Sale.