Business Valuation Calculator
Work out what your business is worth from your last twelve months of revenue, profit and owner pay, and see exactly what is lifting the price and what is holding it back.
Your business and its last 12 months
Money the business paid out for you
What the business owns and owes
What a buyer checks before they offer
What does the business do?
Buyers pay different multiples in different trades.
How long has it traded?
Where is revenue going?
Revenue, last 12 months ($)
Total sales before any costs.
Net profit after all costs ($)
The bottom line on your return.
Your salary, draws and benefits ($)
Depreciation and amortization ($)
Interest on business loans ($)
One-off and personal costs ($)
A legal case, a move, a family phone plan.
Equipment and vehicles at resale value ($)
Leave at 0 if you would rather skip it.
Stock on the shelf at cost ($)
Business debt a sale would have to clear ($)
Can it run without you?
Revenue on contract or repeating
Your biggest customer is worth
Who keeps the books?
Who runs the day to day?
Keep this valuation
Every owner asks the same question before a sale, a buyout or a retirement date: how much is my business worth right now. The honest answer is that your business is worth what a buyer will pay for the earnings it hands them, adjusted for how much work and risk comes attached. This calculator turns that into a number you can plan with, using the same inputs a buyer, a broker and a lender ask for on day one.
Fill in your last twelve months, answer a handful of questions about how the business runs, and you get an estimated value range, the earnings figure the price is built on, the multiple applied to it, and a plain reading of what is lifting your value and what is holding it back. Nothing is emailed to you and nothing is gated. Copy, download or share the result the moment it appears.
How to Use This Business Valuation Calculator
You need three things in front of you: your last full year of revenue, the profit you reported, and what the business paid you personally. Everything else sharpens the answer rather than creating it. Work through the fields from the top and the result updates as you type.
- Pick the industry that matches what you actually sell, not how you are registered. Buyers price a plumbing company and a marketing agency very differently.
- Enter your revenue and net profit for the last twelve months, taken from the same return or set of accounts so the two figures agree.
- Add back what the business paid for you: your salary and draws, depreciation, loan interest, and any one-off or personal cost that will not follow a new owner.
- Enter your equipment and vehicles at realistic resale value, stock at cost, and any business debt a sale would have to clear.
- Answer the five questions about how the business runs. These are the ones that move the multiple, so answer them the way a buyer would after a week on site.
- Read the range, then change one answer at a time to see which weakness is costing you the most.
Use whole-dollar figures and keep every number for the same twelve-month period. Mixing last year’s profit with this year’s revenue is the fastest way to a result you cannot defend in a conversation.
What Your Result Actually Tells You
The calculator does not hand you one figure and leave you to guess at it. Each line answers a question a buyer will put to you later.
The estimated value range
This is the band most offers would land in for a business with your numbers and your answers. A range is the honest format, because two buyers looking at the same accounts will reach different figures depending on what they plan to do next. Treat the middle as your working number and the top as something you have to earn with evidence.
Your seller’s discretionary earnings
Small businesses are priced on what the owner truly takes out, not on the profit line a tax return shows after your salary and your write-offs. The calculator rebuilds that figure and shows every piece of it, so you can see exactly how the value of your business was reached and correct any number that looks wrong.
The multiple applied to your earnings
The multiple is where industry and risk meet. Two businesses earning the same money can be worth very different sums because one of them runs without its owner and the other stops the day the owner takes a holiday. The calculator shows the multiple it settled on so you can see the effect of each answer you change.
The three methods side by side
You also see what the same business is worth priced on earnings, priced on revenue, and priced on what it owns. When those three sit close together, your number is solid. When they spread out, the gap itself is the useful information, and the notes under the result explain what that gap usually means.
How to Value a Small Business the Way Buyers Do
A buyer is not purchasing your history. They are purchasing the income they expect to receive after they pay themselves a fair wage for the job you currently do for free, or for less than market rate. That is the single idea behind every credible small business valuation, and it explains most of the arguments that happen later in a deal.
Once you see the sale that way, the questions in this tool stop feeling like a form and start feeling like the buyer’s checklist. Each one asks how much of your income is likely to still be there twelve months after you hand over the keys.
- Earnings they can rely on. Steady, provable income beats a single spectacular year every time.
- Customers who stay. Contracts, retainers and repeat accounts are worth more than one-off sales at the same revenue.
- A business that runs without you. The less the operation depends on your relationships and your hands, the more transferable it is.
- Records they can verify. If a lender cannot trace your earnings through your returns, the deal gets smaller or disappears.
- Assets that keep working. Vehicles, equipment and fit-out that will not need replacing in year one protect their cash.
- A reason the business keeps winning work. Location, licences, reviews, a trained crew or a named position in the local market.
Seller’s Discretionary Earnings: the Number Your Price Is Built On
Seller’s discretionary earnings, usually shortened to SDE, is the total financial benefit a single full-time owner takes from the business in a year. Most owner-operated companies in the United States are valued on this figure. Larger businesses with a management team in place are usually valued on EBITDA instead, because the owner’s wage is already a real cost rather than an add-back.
What belongs in your add-backs
An add-back is a cost that sits in your accounts but would not exist for a new owner, or that is not a true operating cost at all. Be strict here. Every add-back you cannot evidence will be struck out in due diligence, and a struck-out add-back reduces your price by the multiple, not by the dollar.
- Your own salary, draws, bonuses and the payroll taxes attached to them.
- Depreciation and amortization, which are accounting entries rather than money that left the bank.
- Interest on business loans, because the buyer will arrange their own financing.
- Personal costs run through the business, such as a family phone plan or a vehicle used mainly at weekends.
- Genuine one-off events, such as a legal case, a flood repair or a single office move.
- Wages for a family member who is paid but does not actually work in the business.
What does not belong in your add-backs
Rent at market rate stays in. Wages for staff the business genuinely needs stay in. Marketing you would have to keep spending to hold your current revenue stays in. Repairs that happen every few years are not one-off, they are simply irregular. Adding those back inflates your earnings, and the buyer who spots it will discount everything else you have told them.
What Changes the Value of a Small Business
Two businesses can file almost identical returns and sell for amounts that are thousands of dollars apart. The gap comes from risk, and risk is measurable. These are the levers the calculator weighs when it sets your multiple, and they are the same ones a buyer scores in their head during the first site visit.
- Owner dependence. If every quote, every key relationship and every decision runs through you, a buyer is purchasing a job rather than a business.
- Revenue direction. A business growing steadily is priced forward. A business sliding backwards is priced on what is left after the slide continues.
- Repeat and contracted revenue. Income that renews by default needs far less selling effort from the new owner.
- Customer concentration. When one account is a large slice of revenue, the buyer prices the day that account leaves.
- Quality of records. Clean, accountant-reviewed books widen the buyer pool and open the door to bank financing.
- Depth of the team. Supervisors and managers who stay through a handover carry the operation while the new owner learns it.
How Much Can I Sell My Business For in My Industry
Industry sets the starting point, and your answers move you up or down from there. The patterns below hold across most of the market, and they explain why the same earnings are worth more in one trade than another.
Service businesses and consultancies
Valuing a services company turns almost entirely on how much of the work is personally yours. A consultancy where clients hire the founder by name is hard to transfer. The same revenue delivered by a team under a company brand, on retainers, sits at the top of the range for the trade.
Home services and the trades
HVAC, plumbing, electrical and similar companies tend to price well because demand is steady, the work is licensed and service contracts create repeat revenue. The weak point is usually crew depth: a company with one qualified technician who is also the owner has a ceiling on its value.
Retail, food and hospitality
Thin margins and heavy equipment mean these businesses price lower against revenue than most. Lease terms matter enormously here. A long, assignable lease at a sensible rent can be worth more to a buyer than a good trading year, and a short lease can stop a sale outright.
Health, legal and professional practices
Licensed practices with recurring patients or clients are among the stronger sellers, because the client list transfers and the barriers to entry are real. Expect a buyer to look closely at how many clients are tied to the departing professional rather than to the practice.
Software, SaaS and e-commerce
Anyone looking for a SaaS valuation calculator is really asking about revenue quality. Subscription income that renews with low churn is priced far above the same dollars earned from one-off sales, which is why software and e-commerce brands with genuine recurring revenue sit at the top of the market.
Manufacturing, wholesale and transport
These businesses carry serious assets, so the asset line in your result matters more than it does elsewhere. The value sits in the combination of working equipment, trained staff and supply relationships, and buyers discount hard for machinery that is close to the end of its life.
Who Uses This Tool
This calculator was built for the owner who wants a defensible number before a conversation, not for a textbook exercise. The people who get most out of it are the ones who are about to sit across from someone else and talk about price.
- Owners planning an exit. You want to know whether the sale funds your retirement before you commit to a date.
- Buyers checking an asking price. You have a listing in front of you and you want to test whether the number is reasonable.
- Business partners. Someone is leaving, and the buyout needs a figure both of you can live with.
- Owners preparing for finance. A lender will want a value, and arriving with your earnings already rebuilt saves weeks.
- Accountants and advisers. You want a quick sanity check before a client’s expectations harden around the wrong number.
- Owners who are not selling yet. You want to know which weakness to fix first in the two years before you do.
Use Cases You Can Work Through
Testing whether you can afford to retire
Say you run a landscaping company turning over $620,000, reporting $70,000 profit, and paying yourself $95,000 plus a truck the family uses. Enter the figures with the add-backs and the result is far higher than the profit line suggested. That gap between reported profit and real owner earnings is why so many owners badly underestimate what their company is worth.
Deciding whether an asking price is fair
A buyer looking at a listed salon enters the seller’s own numbers and their own view of the risks. If the seller has priced the business as though it runs without them, but the stylists all follow the owner, the honest answer drops quickly. The result gives the buyer something specific to negotiate with rather than a feeling.
Agreeing a partner buyout
Two partners each run the calculator with the same financials and their own answers on owner dependence and customer spread. Where the two results differ, the disagreement is now visible and narrow, and it can be settled with evidence instead of argument.
Working out what to fix before you sell
An owner runs the tool, then changes one answer at a time. Moving the books from spreadsheets to an accountant, or signing a handful of clients onto annual agreements, shows its effect on the number immediately. That turns a vague plan to tidy things up into a short list ordered by what it is worth.
How to Price a Business for Sale Without Losing the Buyer
Pricing a business to sell is not the same as knowing what it is worth. The valuation sets the ceiling. The asking price sets whether anyone walks through the door. Price too high and the listing sits until it looks stale; price too low and you leave money behind that no negotiation gets back.
A sensible approach is to ask slightly above your working number, with a clear written explanation of the earnings behind it. Buyers do not object to a strong price, they object to a price with nothing underneath it. The U.S. Small Business Administration guide to selling a business sets out the wider process around that decision, from preparing records to handing over.
- Settle on your working number and write down the earnings calculation that produced it.
- Decide what is included: equipment, stock, vehicles, the lease, the phone number and the website.
- Price stock separately at cost rather than burying it in the headline figure.
- Prepare answers for the two weaknesses you already know a buyer will find.
- Set the lowest figure you will accept before the first offer arrives, not after.
- Agree with your accountant how the price is split across assets, because that split changes your tax bill.
What a Buyer Checks Before They Agree Your Price
Once an offer is on the table, your number stops being an opinion and starts being tested. Knowing the order of that test lets you prepare for it.
Your earnings, line by line
Every add-back is matched to a bank entry or an invoice. Anything that cannot be evidenced comes out, and the price falls by the multiple rather than by the dollar, which is why a $10,000 unsupported add-back can cost far more than $10,000.
Whether the revenue survives you
The buyer will ask who the customers actually deal with, how work arrives, and what happens to the pipeline when you leave. Written agreements, a booking system and a team that holds the relationships all answer this before it is asked.
What they have to spend on day one
Ageing vehicles, a lease about to expire, software that needs replacing or a licence that does not transfer are all deducted from what the buyer is willing to pay, because each one is money they must find immediately after closing.
Common Mistakes When Valuing a Small Business
Most valuation arguments trace back to one of the same handful of errors, and all of them are avoidable before you quote a figure to anyone.
- Pricing on revenue alone. Revenue without margin tells a buyer how busy you are, not what they will earn.
- Counting your salary twice. Adding your pay back and then also valuing the business as though it runs without you inflates the number from both ends.
- Treating regular costs as one-off. Equipment replacement and periodic repairs are part of running the business, not exceptions to it.
- Valuing a single best year. Buyers look at the trend, and a standout year without support is treated as luck.
- Ignoring debt the sale must clear. The headline price is not what reaches your account once loans and liens are settled.
- Pricing the effort you put in. The years you worked are real, but a buyer pays for future income, not past sacrifice.
Business Valuation Cost: Calculator, Accountant or Appraiser
How to get a business appraised depends entirely on what the number is for. Using the wrong level of rigour either wastes money or produces a figure nobody will accept.
A free calculator
This tool costs nothing and is the right starting point for planning, for testing a listing, for an early partner conversation, or for deciding what to improve. It is not a certified opinion and will not satisfy a court or a tax filing.
An accountant or broker opinion
A business valuation accountant or a broker’s opinion of value sits in the middle. It is usually based on your actual records plus local market knowledge, and it is often enough for a sale, a buyout or an early lender conversation. Many brokers prepare one at low or no cost when you are considering a listing with them.
A formal appraisal from a certified valuer
A full appraisal from a certified business valuer is a written, defensible report. You need one for divorce proceedings, shareholder disputes, estate and gift tax filings, litigation and some financing. It costs considerably more and takes weeks rather than minutes, and the IRS guidance on the sale of a business explains why the tax treatment of a sale makes that level of detail necessary.
How to Lift Your Value Before You Sell
The multiple applied to your earnings is the part of the result you can still change. Two years of focused work on the right weaknesses usually moves the number more than two years of chasing extra sales.
- Move your bookkeeping to an accountant and keep business and personal spending completely separate.
- Put your repeat customers on written agreements, even simple annual ones, so the revenue is visible as contracted.
- Promote or hire someone who can run the day to day, then genuinely step back from it.
- Reduce your largest customer’s share of revenue by winning smaller accounts rather than one more big one.
- Document your pricing, your suppliers and your process so the knowledge sits in the business, not in your head.
- Deal with ageing equipment and a short lease before a buyer uses either one to push your price down.
Where Your Business Gets Seen While You Plan Your Exit
A business that buyers and customers can find is easier to value and easier to sell, because demand you can point to is demand a buyer can believe. A visible listing with accurate contact details, a clear description of what you do and the right category is part of the asset you are selling.
You can add your business listing free on GetListedUSA and keep it current while you plan. Browse the full list of business categories to see where your company fits, check which companies already appear in your city or your state, or look through the directory of business listings to see how similar companies present themselves. More free business tools are available if you want to work through other numbers, and you can contact us with a question about your listing.
Frequently Asked Questions
How much is my business worth?
Your business is worth what a buyer will pay for the earnings it gives them, adjusted for risk. Enter your last twelve months of revenue, profit and owner pay and the calculator returns an estimated value range, the owner earnings behind it and the multiple applied.
How do you calculate business valuation for a small business?
Most owner-operated US businesses are valued by rebuilding the real owner earnings, then applying a multiple set by the industry and the risk attached to the business. The calculator does both and shows you every line, so you can see how the figure was reached.
What is SDE and why is my business priced on it?
SDE stands for seller's discretionary earnings, the total benefit one full-time owner takes from the business in a year. It adds your salary, depreciation, loan interest and genuine one-off costs back to net profit, because none of those are what the business really earns.
How much can I sell my business for?
The sale price usually lands near your owner earnings multiplied by the going rate for your trade, plus stock at cost and minus any debt the sale has to clear. Recurring revenue, a team in place and clean records push the figure up; heavy owner dependence pulls it down.
How much does a business valuation cost?
This calculator is free. A broker's opinion of value or an accountant's estimate sits in the middle and is often enough for a sale or a buyout. A formal appraisal from a certified business valuer costs considerably more and is needed for court, tax and some financing.
Can I use this calculator to value a SaaS or online business?
Yes. Choose the software and SaaS or e-commerce industry and answer the repeat revenue question honestly, because subscription income that renews with low churn is priced well above the same revenue earned from one-off sales.
Does this calculator work for a business that is losing money?
It does. When your add-backs do not reach positive owner earnings, the result switches to what the business owns rather than what it earns, because that is how a buyer would price it, and the notes explain what that means for your sale.
How accurate is a free business valuation calculator?
It is accurate enough to plan with, test an asking price or open a partner conversation. It cannot see your lease, your contracts, your licences or your local market, so have the figures reviewed by an accountant or a licensed valuer before you sign anything.