Business Valuation Calculator
Estimate the market value of a business using revenue multiples, EBITDA multiples, and earnings-based P/E valuation. Compare all methods side-by-side.
What Is the Business Valuation Calculator?
The Business Valuation Calculator estimates the market value of a business using three industry-standard methods: revenue multiples, EBITDA multiples, and earnings-based P/E valuation. Compare all methods side-by-side with industry benchmarks to get a comprehensive valuation range. Once you have your valuation, use the ROI Calculator to estimate the return a buyer could expect on their investment.
Three Valuation Methods
Revenue Multiple — Multiplies annual revenue by an industry-specific factor. Best for high-growth companies or businesses with negative EBITDA. Easy to calculate but ignores profitability.
EBITDA Multiple — The most widely used method in private M&A. Multiplies earnings before interest, taxes, depreciation, and amortization by a sector multiple. Reflects true operating profitability independent of financing decisions. Our CAGR Calculator can help you measure how a business investment has grown year over year.
P/E Earnings Method — Multiplies net income by the price-to-earnings ratio of comparable public companies. Best for mature, consistently profitable businesses in established industries.
What Determines Your Multiple?
- Growth rate — 20%+ YoY growth can double your multiple
- Revenue quality — Recurring/subscription revenue commands premium
- Customer concentration — One client over 30% of revenue hurts valuation
- EBITDA margin — 20%+ is the threshold for premium buyers
- Management depth — Owner-dependent businesses sell at a discount
- Market conditions — Interest rates and M&A activity affect all multiples
How to Use This Calculator
- Enter your annual revenue (required).
- Optionally enter EBITDA and net income for additional valuation methods.
- Select your industry to auto-fill typical valuation multiples.
- If you need financing to support growth plans, the Business Loan Calculator can help you estimate loan payments based on your funding needs.
- Customize the multiples as needed for your specific business.
- View your estimated valuation range across all applicable methods.
Frequently Asked Questions
What is business valuation?
Business valuation is the process of determining the economic value of a company. It is used in mergers and acquisitions (M&A), fundraising, partner buyouts, estate planning, and legal disputes.
Which valuation method is most accurate?
No single method is definitively most accurate. The EBITDA multiple method is most commonly used in private M&A for profitable businesses. Revenue multiples are preferred for high-growth or pre-profit companies.
What EBITDA multiple is typical for small businesses?
Main Street businesses (under $2M revenue) typically sell at 2-4x SDE or EBITDA. Lower-middle-market companies ($2M-$10M) sell at 4-7x EBITDA. Technology and recurring revenue businesses often achieve higher multiples.
How can I increase my business valuation?
Key strategies include: increasing recurring revenue, improving EBITDA margins above 20%, reducing customer concentration, building a management team, documenting processes, and growing revenue consistently 15%+ per year.
Does this calculator give an exact price?
No, this calculator provides an estimate based on market multiples. Actual transaction prices depend on negotiation, due diligence, deal structure, and current market conditions. For a binding valuation, engage a certified business appraiser.
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