Business Valuation Calculator
Earnings Multiple (SDE)
Value a small business using seller's discretionary earnings (SDE) multiple
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Revenue Multiple
Value a business using revenue multiples common in your industry
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EBITDA Multiple
Value a business using EBITDA multiples
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Formula
SDE Valuation = SDE × Multiple | Enterprise Value = EBITDA × Multiple | Equity Value = Enterprise Value - Debt + Cash | SDE = Net Income + Owner Salary + D&A + Interest
Frequently Asked Questions
How do you value a small business?
The most common method for small businesses is SDE (Seller's Discretionary Earnings) multiple. SDE = Net Income + Owner's Salary + Depreciation + Interest. Typical multiples for small businesses range from 1.5x to 4x SDE depending on the industry, size, growth, and risk factors.
What EBITDA multiple should I use?
EBITDA multiples vary by industry and company size. Small businesses: 3-5x. Mid-market: 5-8x. Large companies: 8-15x. SaaS/tech: 10-20x+. Manufacturing: 4-7x. Healthcare: 6-12x. Higher growth and recurring revenue command higher multiples.
What factors affect business valuation?
Key factors include: recurring revenue, growth rate, profit margins, customer concentration (risk if one client is >20% of revenue), industry trends, competitive moat, owner dependency, and quality of financial records.
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