Business Valuation Calculator
A ballpark value for a small business using market multiples — SDE, adjusted EBITDA, or revenue — with the add-backs shown line by line, a low-to-high range, and what it means for the owner after debt.
Ben / Reviewed Sep 27, 2026 / v2.0.0
Results
Showing the numbers you calculated- Business value (base)
- $1,251,250.00
- 2.75× seller's discretionary earnings (sde) of $455,000.00
- Range
- $910,000.00
- to $1,592,500.00
- Owners' equity (base)
- $1,101,250.00
- After ($150,000.00) of cash minus debt
- SDE
- $455,000.00
- Adjusted EBITDA
- $370,000.00
Low, base, and high
| Case | Multiple | Business value | Owners' equity |
|---|---|---|---|
| Low | 2.00× | $910,000.00 | $760,000.00 |
| Base | 2.75× | $1,251,250.00 | $1,101,250.00 |
| High | 3.50× | $1,592,500.00 | $1,442,500.00 |
Cross-check
The base value expressed as a multiple of each measure — handy for comparing with sales you've heard about.
| Measure | Amount | Base value ÷ it |
|---|---|---|
| Seller's discretionary earnings (SDE) | $455,000.00 | 2.75× |
| Adjusted EBITDA | $370,000.00 | 3.38× |
| Revenue | $1,500,000.00 | 0.83× |
From profit to SDE
| Amount | |
|---|---|
| Pre-tax profit | $250,000.00 |
| + Interest | $12,000.00 |
| + Depreciation and amortization | $28,000.00 |
| + One-time expenses | $25,000.00 |
| − One-time income | ($10,000.00) |
| ± Other adjustments | $0.00 |
| + All of the owner's pay and benefits | $150,000.00 |
| SDE | $455,000.00 |
If earnings come in higher or lower
Owners' equity at each multiple.
Swipe the table sideways to see all 5 columns.
| Change | Earnings (or revenue) | Low | Base | High |
|---|---|---|---|---|
| -20.00% | $364,000.00 | $578,000.00 | $851,000.00 | $1,124,000.00 |
| -10.00% | $409,500.00 | $669,000.00 | $976,125.00 | $1,283,250.00 |
| 0.00% | $455,000.00 | $760,000.00 | $1,101,250.00 | $1,442,500.00 |
| 10.00% | $500,500.00 | $851,000.00 | $1,226,375.00 | $1,601,750.00 |
| 20.00% | $546,000.00 | $942,000.00 | $1,351,500.00 | $1,761,000.00 |
What this does
Small businesses usually sell for a multiple of what they earn. The trick is getting "what they earn" right: the tax return shows a profit shaped by the owner's pay, one-off events, and depreciation, and a buyer will rebuild that number from scratch.
This does the rebuilding — SDE or adjusted EBITDA, with every add-back shown — then applies a low, base, and high multiple and shows what's left for the owners after debt.
How the math works
Start from pre-tax profit and add back what a new owner wouldn't pay:
SDE = pre-tax profit + interest + depreciation + one-time expenses − one-time income ± other + all of the owner's pay adjusted EBITDA = the same, but only the owner's pay above (or below) market
SDE is for businesses where the buyer will also be the operator. Adjusted EBITDA assumes they'll hire a manager — so it's lower, and it gets a higher multiple.
business value = earnings × multiple owners' equity = business value + cash − debt
Most small-business sales are asset sales, "cash-free, debt-free": the seller keeps the cash and pays off the loans. That's why the equity line matters to the seller.
Check my math: a worked example
$1,500,000 of revenue and $250,000 of pre-tax profit, with the owner taking $150,000 in pay and benefits.
- Add back interest ($12,000), depreciation ($28,000), and one-time items ($15,000 net).
- SDE (all of the owner's pay added back): $455,000.00. Adjusted EBITDA (only the $65,000 above a $85,000 manager's pay): $370,000.00.
- On Seller's discretionary earnings (SDE): 2.00× = $910,000, 2.75× = $1,251,250, 3.50× = $1,592,500.
- After $50,000 of cash and $200,000 of debt, the owners' base equity is $1,101,250.00.
These numbers come straight from the calculator using its example inputs — if the math ever changes, this example changes with it.
Mistakes I see a lot
- Using taxable income as-is. Owner pay, depreciation, and one-time events all need adjusting before you apply a multiple.
- Adding back the owner's whole salary and then using an EBITDA multiple. SDE and EBITDA multiples aren't interchangeable.
- Adding back "expenses" a buyer would still have. If the business needs it, it isn't an add-back.
- Forgetting the debt. The value from a multiple is for the business; the loans come out of the owner's share.
- Using a multiple from a different kind of business. A software company and a plumbing company don't trade at the same multiples.
Questions people ask
- Where do multiples come from?
- Sales of similar businesses — brokers, industry associations, and databases like BizComps or DealStats track them. Size matters a lot: bigger, steadier businesses get higher multiples.
- When is a revenue multiple used?
- When earnings don't tell the story — early-stage or fast-growing businesses, or industries (like some subscription businesses and accounting practices) where revenue is the standard yardstick.
- Is this what my business will sell for?
- It's a reasonable starting range. The final price depends on the buyer, the deal terms (seller financing, earn-outs), working capital, and what due diligence turns up. For anything important, get a formal valuation.
Assumptions and limits
- A market (multiples) approach only — no discounted cash flow or asset appraisal. It's a starting point for a conversation, not an appraisal.
- SDE = pre-tax profit + interest + depreciation and amortization + one-time expenses − one-time income ± other adjustments + all of one working owner's pay and benefits.
- Adjusted EBITDA uses the same add-backs, but only the owner's pay above (or below) what you'd pay a manager to run it.
- The value from a multiple is for the business itself, cash-free and debt-free. The owners' equity = that value + cash − debt.
- Multiples depend on the industry, size, growth, and risk — typical small-business ranges are roughly 1.5–4× SDE and 3–7× adjusted EBITDA. Use numbers from real sales of businesses like yours if you can.
- Working capital, taxes on the sale, and deal terms (earn-outs, seller notes) aren't included.
Disclaimer: Educational and planning use only. Results depend on what you enter and may not match your lender, your tax return, or professional accounting treatment. Informational content + opinions only — not tax/legal advice.