Most profitable businesses are valued on a multiple of their yearly earnings: SDE (seller's discretionary earnings) for owner-run businesses and EBITDA for larger ones. Our free calculator will give you a valuation range in a few minutes.
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How Business Valuation Works
- Find the earnings. Start from profit, then add back owner pay and one-off costs that a buyer won't carry. That's SDE. Larger businesses use EBITDA.
- Pick the multiple. Buyers pay more for steady profit, diversified customers and traffic, and a business that runs without you. Most profitable businesses we see value at 3 to 6 times annual earnings or more.
- Check it against the market. Recent comparable sales and buyer demand move the range.
Sell-side valuation explained · What is a good multiple? · What lowers the value of a business
Business Valuation FAQs
How do I value my business?
Work out its SDE or EBITDA, then apply the multiple buyers pay for businesses like yours, adjusted for growth, risk and owner dependence. A valuation range is a starting point for the sale, not a formal appraisal.
Is a free business valuation accurate?
A calculator gives a range from the numbers you enter. An advisor's review adds what a calculator can't see, like add-backs, customer concentration and buyer demand for your type of business.