Business Owners

Business value estimator

A multiple-based estimate of what a company might be worth, and an honest view of the discounts buyers apply.

EBITDA or SDE Owner add-backs Multiple, low Multiple, high Owner-dependence discount (%) Customer concentration discount (%) Cash on the balance sheet Interest-bearing debt

Equity value, midpoint·

Adjusted earnings: ·
Enterprise value range: ·
Equity value range: ·
Effective multiple: ·

How it works

What this is actually calculating.

Most small companies trade on a multiple of earnings, adjusted for the things that make the earnings more or less reliable in someone else's hands. The calculator starts from adjusted earnings, applies a range of multiples, compounds the discounts against each other, then moves from enterprise value to equity value by adding cash and subtracting debt.

The discount fields are where owners are usually surprised. A company that depends on the owner, or on one large customer, does not fetch the multiple the industry chart shows. Those two inputs frequently move the answer more than the multiple itself does.

What moves the number

The parts that decide the answer.

Do not count the add-backs twice

Seller discretionary earnings already include the owner compensation and the discretionary spending that the add-backs field asks for. Enter SDE and then add them again and the value is overstated, by about seven hundred thousand dollars at the defaults here. Either enter EBITDA and use the add-backs, or enter SDE and leave them at zero.

Three different things get called valuation

This is a multiple-based estimate, useful for framing the question. A full value assessment goes considerably further, scoring the eight functional areas that actually drive the number and pricing what improving each one is worth. A certified appraisal is a separate credentialed engagement, and it is what a transaction, a gift or a dispute requires.

Owner dependence is the biggest lever

If the business cannot run for ninety days without you, a buyer is purchasing a job rather than an asset, and prices it accordingly. It is also the most fixable of the discounts.

Add-backs have to survive diligence

Personal expenses run through the business are legitimately added back only if you can document them. Anything you cannot evidence will be removed from the earnings a buyer underwrites.

Questions

Before you rely on it.

Is this a certified business valuation?

No, and neither is the assessment I run with clients. This is a multiple-based estimate. The assessment goes much further, measuring the drivers behind the number and mapping what fixing each is worth, but a certified appraisal is performed by a credentialed appraiser and that is what you would need for a transaction, a gift, or a dispute.

Should I use EBITDA or SDE?

SDE for owner-operated businesses under roughly two million in earnings, EBITDA above that. Be consistent with whichever multiple range you apply.

Where do I get a realistic multiple?

Industry surveys and a broker or appraiser who sees actual transactions in your sector. The defaults here are illustrative only.

Before you rely on it

About this calculator.

An illustration, not advice

This is an educational illustration, not investment, tax, or legal advice, and not a recommendation or projection of any particular result. It uses only the assumptions you enter.

Real returns are not this smooth

Where a return is involved it is treated as constant, which no real portfolio is. Actual results will differ, and a sequence of poor early returns can change an outcome substantially even when the average holds.

Nothing you type leaves your browser

Every calculation runs on your own machine. Nothing you enter is transmitted or stored, and none of it reaches me unless you ask for a PDF and give me your details.

Talk to your CPA and attorney before relying on any of it.See all twelve calculators

Keep Reading

From the blog

All articles

September 24, 2026