Business Valuation Calculator

Estimating Your Business Value

Understanding what your business is worth is essential for exit planning, partnership negotiations, estate planning, and strategic decision-making. Business valuation is both an art and a science, combining financial metrics with qualitative factors to determine fair market value. While a professional valuation provides the most accurate assessment, our calculator gives you a solid preliminary estimate.

Our business valuation calculator uses multiple proven methodologies including revenue multiples, EBITDA multiples, and asset-based approaches. By comparing results across these methods and applying industry-specific benchmarks, you'll get a realistic range of what buyers might pay for your company.

Revenue Multiple Valuation Method

The revenue multiple method values businesses based on annual sales. This approach is particularly useful for high-growth companies, SaaS businesses, and companies with negative or inconsistent earnings. Revenue multiples vary significantly by industry, ranging from 0.3x for construction companies to 10x or more for high-growth software companies.

Buyers often prefer revenue multiples for predictable, subscription-based businesses where revenue quality matters more than current profitability. Strong revenue growth, high customer retention, and recurring revenue models command premium multiples in today's market.

EBITDA Multiple Valuation Method

EBITDA multiples are the gold standard for valuing profitable businesses. EBITDA measures earnings before interest, taxes, depreciation, and amortization, providing a clear picture of operational profitability. This method works well for established businesses with stable earnings and is the preferred approach for most private equity buyers and strategic acquirers.

Industry-specific EBITDA multiples typically range from 3-4x for traditional businesses to 12-20x for high-growth technology companies. Factors like customer diversification, competitive moats, management depth, and growth trajectory significantly impact the multiple buyers will pay.

Asset-Based Valuation Approach

The asset-based approach values a business based on net tangible assets. This method calculates total assets minus total liabilities to determine book value. While less common for operating businesses, this approach provides a floor value and is particularly relevant for asset-heavy companies in manufacturing, real estate, or distribution.

Most healthy businesses sell for well above book value because buyers pay for intangible assets like customer relationships, brand value, intellectual property, and future earnings potential. However, asset value provides important context, especially if earnings are temporarily depressed.

Industry Considerations and Growth Impact

Valuation multiples vary dramatically across industries. Software and SaaS companies command the highest multiples due to scalability and recurring revenue. Professional services businesses trade at moderate multiples. Construction and traditional retail often sell at the lowest multiples due to cyclicality and lower margins.

Growth rate significantly impacts valuation. A business growing 20% annually might trade at twice the multiple of a flat or declining business in the same industry. Buyers pay premium prices for growth, particularly if it's sustainable and capital-efficient. Our calculator adjusts multiples based on your company's growth profile.

Using Your Valuation Estimate

This calculator provides preliminary estimates for planning purposes. Actual valuations depend on numerous factors including management quality, customer concentration, competitive position, market conditions, and deal structure. Use this estimate to set realistic expectations, but engage qualified valuation professionals when making significant decisions about selling your business, bringing in partners, or estate planning.