Business Valuation Estimator
Wondering how much your business is worth? Estimate an indicative valuation range from your earnings and industry-typical SDE or EBITDA multiples.
Your earnings
Use last year's figures — or a normalized average of the last two to three years.
Total sales for the year (for context).
Pre-tax profit shown on your income statement.
Add-backs
Costs a new owner would not carry — added back to show the true earning power.
Your total compensation drawn from the business.
Personal vehicles, travel, one-off legal fees, family wages.
Industry & method
Industry sets the typical multiple range applied to your earnings.
Typical range: 2.0×–3.5×SDE / 3.0×–5.0× EBITDA.
For larger, management-run businesses. Subtracts a market-rate manager's salary from SDE.
Estimated value
Enter your net profit and add-backs to see an estimated valuation range.
Note: This is an indicative estimate for planning, not a formal valuation or legal advice. A real deal needs a Chartered Business Valuator, accountant-reviewed financials, and a lawyer to structure the transaction.
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How business valuation actually works
A multiple of earnings is the starting point — but the base you use, the add-backs you can defend, and the quality of the business decide the real number.
Start with SDE
Seller's discretionary earnings (SDE) is your net profit plus the one owner's salary and the personal or one-time expenses run through the business. It shows a buyer the total financial benefit of owning the company — the base most small-business valuations multiply.
SDE vs. EBITDA
SDE adds back a single owner's full compensation and suits owner-operated businesses. EBITDA subtracts a market-rate manager's salary and is used for larger companies that run without the owner. As a business grows, buyers shift from an SDE to an EBITDA lens.
Legitimate add-backs
Add-backs are non-essential or one-time costs a new owner would not incur: an above-market owner salary, a family member's pay, personal vehicles or travel, or a one-off legal bill. Every add-back must be documented — buyers and their accountants will challenge each one.
What moves the multiple
Within an industry range, buyers pay more for recurring revenue, a diversified customer base, clean books, a business that runs without the owner, and steady growth. Customer concentration, owner-dependence, or messy records pull the multiple toward the low end.
Asset sale vs. share sale
In an asset sale the buyer purchases specific assets, leaving most liabilities behind — buyers often prefer this. In a share sale the buyer acquires the company itself, which can unlock the seller's lifetime capital gains exemption. The structure changes both price and after-tax proceeds.
From estimate to deal price
This tool gives a directional range for planning. A real transaction relies on a Chartered Business Valuator (CBV) report, accountant-reviewed financials, and a lawyer to structure and paper the deal — the number that survives due diligence is what actually gets paid.
How much is my business worth?
A common quick estimate for a small business is its seller's discretionary earnings (SDE) multiplied by an industry multiple — often somewhere between 1.5× and 4× SDE, with fast-growing tech businesses higher. Enter your earnings above to see an indicative range. The real figure depends on your specific financials, growth, and deal structure, and is confirmed by a professional valuation.
What is the difference between SDE and EBITDA?
SDE (seller's discretionary earnings) adds one owner's full salary and discretionary expenses back to profit, so it reflects the total benefit to an owner-operator. EBITDA (earnings before interest, taxes, depreciation, and amortization) instead subtracts a market-rate manager's salary, showing what the business earns run by a hired team. Owner-operated businesses are usually valued on SDE; larger, management-run businesses on EBITDA.
What drives the valuation multiple up or down?
Buyers pay a higher multiple for recurring or contracted revenue, a diversified customer base, clean and reviewed financials, documented systems, steady growth, and a business that runs without the current owner. Heavy owner-dependence, customer concentration, declining sales, or poor records push the multiple toward — or below — the bottom of the range.
Why is a valuation a range instead of a single number?
No two buyers value a business identically. A strategic buyer may pay more than a financial buyer, deal terms (cash vs. vendor take-back vs. earn-out) shift the headline price, and the multiple itself moves with the quality of your earnings and records. A range reflects that reality; the final price is set through negotiation and due diligence.
Asset sale or share sale — which is better?
It depends on which side you are on. Buyers often prefer an asset sale because they choose the assets and leave most liabilities behind. Sellers often prefer a share sale because it can qualify for the lifetime capital gains exemption on qualifying shares. The structure materially affects both price and after-tax proceeds, so it is negotiated with legal and tax advice.
Is this calculator an official business valuation?
No. It is a free educational estimate to help you plan and set expectations. A defensible valuation for a sale, financing, dispute, or tax filing requires a Chartered Business Valuator (CBV), accountant-reviewed financials, and a lawyer to structure the transaction. Use this range as a starting point for those conversations, not as a price.