Business Valuation Estimator

An SDE-based value range, adjusted for the things buyers actually discount.

Your numbers

Annual revenue$Net profit on the books$Owner salary & benefits taken$Interest expense$Depreciation & amortization$One-time / non-recurring expenses$Personal expenses run through the business$Owner dependency score (0–100)Recurring / contracted revenue (%)%Largest customer as % of revenue%Revenue growth rate (%)%Total interest-bearing debt$Excess cash that would transfer$

Your result

Seller's discretionary earnings (SDE): $292,000
SDE margin: 19.5%
Estimated multiple range: 2.5× – 3.5×
Low estimate (business value): $732,920
Mid estimate (business value): $878,920
High estimate (business value): $1,024,920
Estimated proceeds after debtMid estimate less interest-bearing debt, plus transferring cash.: $698,920
Value unlocked by cutting owner dependency to 25The multiple buyers apply improves as the business stops requiring you.: $116,800

Roughly 2.5× to 3.5× SDE

On $292,000 of SDE that's a business value near $878,920. The multiple is driven far more by risk than by revenue: owner dependency, customer concentration, recurring revenue and margin quality. Reducing dependency alone is worth about $116,800 here — which is why it's the highest-return project available before a sale.

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What this number actually tells you

Small businesses are valued on seller's discretionary earnings — what the business earns for one owner-operator before their own compensation, interest, depreciation and one-time items — multiplied by a number that reflects risk.

Owners fixate on the multiple and ignore what moves it. Revenue barely matters. What buyers pay for is transferability: can the business run without you, is the revenue predictable, is any single customer a threat, and is the margin real.

This estimator calculates your SDE, then adjusts a size-based multiple for owner dependency, recurring revenue, customer concentration, growth and margin quality. It's an estimate to plan against, not an appraisal.

How the math works

01SDE = net profit + owner salary and benefits + interest + depreciation and amortization + one-time expenses + personal expenses run through the business.
02Base multiple by SDE size: under $100K ≈ 1.8×, $100K–$250K ≈ 2.2×, $250K–$500K ≈ 2.7×, $500K–$1M ≈ 3.2×, above $1M ≈ 4.0×.
03Adjustments: owner dependency ±0.5, recurring revenue up to +0.6, customer concentration above 25% up to −0.6, growth +0.4 / −0.4, SDE margin ±0.25.
04Business value = SDE × multiple. Estimated proceeds = business value − interest-bearing debt + transferring cash.

What to do with the answer

If a sale is two or more years out, work the multiple, not the earnings. Dependency, contracts and customer mix are what re-rate the business.
Clean up the books a full two to three years before selling. Buyers discount adjustments they can't verify.
Diversify away from any customer above 20–25% of revenue. That single line item can cost you half a turn of multiple.
Get a real valuation from a broker or appraiser before making a decision. Use this to know roughly where you stand and what to fix.

Want someone to read these numbers with you?

The Growth Assessment is a 30-minute conversation about what your numbers are telling you and what to fix first. No pitch deck, no PDF.

Schedule Your Growth Assessment Or call (737) 888-0415

Questions owners ask about this

What multiple do small businesses sell for?

Most small businesses under $1M of SDE trade between 2× and 3.5× SDE, with larger and less owner-dependent businesses reaching 4× and beyond. Below $100K of earnings, buyers are essentially purchasing a job and multiples compress under 2×.

What is SDE and how is it different from EBITDA?

SDE adds back one owner's full compensation and perks, because a small-business buyer will replace the owner themselves. EBITDA does not add back a market-rate manager's salary and is used for larger businesses that already have management in place.

What increases the value of a small business most?

Reducing owner dependency, adding recurring or contracted revenue, diversifying the customer base, and proving consistent margins with clean books. Those change the multiple, and the multiple moves value far more than one good revenue year.

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