How Much is My Business Worth Calculator

Business Valuation Calculator

Estimate the worth of your business using common valuation multiples. This calculator provides an approximation based on your financial performance and industry benchmarks.

function calculateBusinessWorth() { var annualRevenue = parseFloat(document.getElementById('annualRevenue').value); var annualNetProfit = parseFloat(document.getElementById('annualNetProfit').value); var revenueMultiple = parseFloat(document.getElementById('revenueMultiple').value); var profitMultiple = parseFloat(document.getElementById('profitMultiple').value); var resultDiv = document.getElementById('businessWorthResult'); if (isNaN(annualRevenue) || isNaN(annualNetProfit) || isNaN(revenueMultiple) || isNaN(profitMultiple) || annualRevenue < 0 || annualNetProfit < 0 || revenueMultiple <= 0 || profitMultiple <= 0) { resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.'; return; } var revenueBasedValuation = annualRevenue * revenueMultiple; var profitBasedValuation = annualNetProfit * profitMultiple; var averageValuation = (revenueBasedValuation + profitBasedValuation) / 2; resultDiv.innerHTML = '

Estimated Business Valuation:

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Understanding Your Business Worth

Determining the value of your business is crucial for various reasons, whether you're planning to sell, seeking investment, or simply want to understand your company's financial health. While professional valuations can be complex and involve many factors, this calculator provides a quick estimate using common industry multiples.

What is Business Valuation?

Business valuation is the process of determining the economic value of a whole business or company unit. It's used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership, taxation, and even divorce proceedings.

Common Valuation Methods

There are several widely accepted methods for valuing a business:

• Asset-Based Valuation: This method sums the fair market value of all the company's assets (tangible and intangible) and subtracts its liabilities. It's often used for businesses with significant physical assets.
• Discounted Cash Flow (DCF): This method projects a company's future cash flows and discounts them back to their present value. It's considered one of the most robust methods but requires detailed financial projections.
• Market Multiple Approach: This is the method used in this calculator. It involves comparing your business to similar businesses that have recently been sold or valued. The value is derived by applying a multiple (e.g., a multiple of revenue or profit) to your company's financial metrics.

How Multiples Work

Multiples are ratios that compare a company's value to a specific financial metric. The most common multiples are:

• Revenue Multiple: Business Value / Annual Revenue. For example, a 1.5x revenue multiple means the business is valued at 1.5 times its annual revenue. This is often used for high-growth companies or those with lower profit margins.
• Net Profit Multiple (or EBITDA Multiple): Business Value / Annual Net Profit (or EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortization). For example, a 4x net profit multiple means the business is valued at 4 times its annual net profit. This is common for established, profitable businesses.

The appropriate multiple can vary significantly based on industry, growth rate, market conditions, competitive landscape, and the unique characteristics of the business. For instance, a tech startup might command a higher revenue multiple due to its growth potential, while a stable service business might have a higher profit multiple.

Typical Industry Multiples (Examples)

It's important to research typical multiples for your specific industry. Here are some general ranges, but these can fluctuate wildly:

• Software/SaaS: Revenue multiples often range from 3x to 10x+ (for high-growth), Profit multiples from 5x to 15x+.
• E-commerce/Retail: Revenue multiples from 0.5x to 2x, Profit multiples from 2x to 6x.
• Service Businesses (e.g., consulting, agencies): Revenue multiples from 0.5x to 1.5x, Profit multiples from 2x to 5x.
• Manufacturing: Revenue multiples from 0.3x to 1x, Profit multiples from 3x to 6x.

These are very broad ranges. A business with strong recurring revenue, high customer retention, proprietary technology, or a strong brand will typically command higher multiples.

Important Disclaimer

This calculator provides a simplified estimate based on common valuation multiples. It does not account for many qualitative factors that significantly impact a business's true worth, such as:

• Brand strength and intellectual property
• Customer concentration
• Management team depth
• Market position and competitive advantages
• Operational efficiency and scalability
• Debt and working capital requirements
• Future growth prospects and risks

For an accurate and comprehensive valuation, it is always recommended to consult with a professional business appraiser or financial advisor.