Free Business Valuation Calculator

How Much Is My Business Worth?

The value of a small business is primarily determined by its earnings — specifically, its Seller's Discretionary Earnings (SDE). The basic formula is: SDE × Industry Multiple = Estimated Value. A restaurant earning $200,000 in SDE with a 2.5x multiple is worth roughly $500,000. But the "right" multiple depends on dozens of factors specific to the business, the industry, and the market.

How Business Valuation Multiples Work

A valuation multiple represents how many years of earnings a buyer is willing to pay for. A 2.5x multiple means the buyer pays 2.5 years of current earnings to purchase the business. Higher multiples reflect lower risk and higher growth potential. Lower multiples reflect higher risk or declining performance.

Factors That Increase Business Value

Several factors push a business toward the higher end of its valuation range: recurring revenue streams that provide predictable income, a diversified customer base where no single client represents more than 10-15% of revenue, an owner who is not critical to daily operations, strong and consistent growth trends over the past 3-5 years, a long-term lease with favorable terms, clean and well-organized financial records, and trained employees who can operate independently.

Factors That Decrease Business Value

On the other side, certain factors pull a business toward the lower end — or below — its expected range: heavy owner dependency where the business can't function without the current owner, customer concentration where one or two clients account for the majority of revenue, declining revenue trends, a short or unfavorable lease, messy or incomplete financial records, pending legal issues or unresolved disputes, and deferred maintenance on equipment or facilities.

SDE Multiple Ranges by Industry (2026)

The table below shows typical SDE multiple ranges for common small business industries. These are general ranges based on industry research and may vary based on location, size, and business-specific factors.

These are general ranges based on industry research. Individual businesses may sell outside these ranges. For verified transaction data, consult BizComps, DealStats, PeerComps, or ValuSource.

When to Get a Professional Business Valuation

A simplified calculator like this one is perfectly fine for initial research and preliminary estimates — when you're just trying to get a ballpark sense of what a business might be worth. However, a professional valuation is essential when listing a business for sale (sellers expect and lenders require formal documentation), when applying for SBA financing (lenders need a formal Broker Opinion of Value), during partnership disputes or buyouts, in divorce proceedings where business assets need to be divided, and for estate planning purposes. In these situations, the stakes are too high for a rough estimate.