Business Valuation Calculator
Estimate the market value of your company using the EBITDA Multiple Method.
Annual EBITDA:
$0.00
Enterprise Value:
$0.00
Net Asset Adjustment:
$0.00
Total Estimated Business Value:
$0.00
How Business Valuation Works
Valuing a business is a critical step for owners looking to sell, attract investors, or plan for the future. This calculator utilizes the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) multiplier method, which is the industry standard for small to medium-sized enterprises (SMEs).
The Core Formula
The calculation follows a logical progression to determine what a buyer might pay for the operational success of the company plus its net assets:
- Step 1: Calculate EBITDA (Revenue – Operating Expenses). This represents the core profitability of your operations.
- Step 2: Apply the Multiplier. This factor varies by industry, growth rate, and risk. (EBITDA × Multiplier = Enterprise Value).
- Step 3: Equity Adjustment. We add the cash currently in the business and subtract all outstanding debts to find the final Equity Value.
Common Industry Multipliers
| Industry Type | Average Multiplier Range |
|---|---|
| SaaS / Technology | 6.0x – 12.0x |
| Manufacturing | 4.0x – 6.0x |
| Retail & E-commerce | 2.5x – 4.5x |
| Professional Services | 3.0x – 5.0x |
| Construction / HVAC | 2.5x – 4.0x |
Realistic Example
Imagine a local manufacturing firm with the following financials:
- Annual Revenue: $2,000,000
- Operating Expenses: $1,500,000
- EBITDA: $500,000
- Industry Multiplier: 4.0x
- Cash: $100,000 | Debt: $250,000
In this case, the Enterprise Value is $2,000,000 ($500k x 4). After adjusting for debt and cash (+$100k – $250k), the final Business Valuation is $1,850,000.
Factors that Increase Your Multiplier
If you want to sell your business for a higher price, focus on improving these "Value Drivers":
- Recurring Revenue: Subscription models are valued higher than one-time sales.
- Owner Independence: A business that runs without the owner's daily involvement is worth more.
- Customer Concentration: Having no single customer representing more than 10% of revenue reduces risk.
- Growth Trends: A company with 20% year-over-year growth commands a higher multiple than a stagnant one.