Business Valuation Calculator

Most small businesses get valued the same way: take a year of normalized earnings and multiply it by a number. That number is the multiple. A home services company earning 500,000 in SDE at a 3.5x multiple is worth about 1.75 million. The whole game is figuring out which multiple is fair, and that's where the range comes in.

The multiples in this tool are typical SDE bands for SMB deals in the 500,000 to 10 million range. They're directional. A real number depends on your actual books, and most buyers confirm it with a lender or an advisor before they sign anything. We built the calculator to give you a starting point in seconds, not to replace a proper valuation.

Two businesses in the same industry with the same earnings can trade at very different multiples. Here's what pushes the number in each direction.

• Size. Bigger earnings generally earn a higher multiple. A business doing 2 million in SDE is less risky than one doing 200,000, so buyers pay up for it.
• Owner dependence. If the whole thing runs on the owner's relationships and shows up at 6am every day, that's a discount. A management team that stays after close pushes the multiple up.
• Recurring revenue. Contracts, subscriptions, and repeat customers are worth more than one-off project work. Predictable cash flow is the single biggest multiple driver.
• Customer concentration. If one customer is 40% of revenue, losing them sinks the business. Buyers haircut the multiple hard for concentration risk.
• Clean books. Reviewed or audited financials, clear add-backs, and a tidy quality of earnings move you toward the high end. Messy or commingled books do the opposite.

SDE and EBITDA both measure earnings, but they aren't the same number. SDE adds a market-rate owner salary back into the business, so it's the figure owner-operated deals usually trade on. EBITDA does not add the owner salary back, so for the same business EBITDA is the smaller number and its multiple tends to run a little higher. The toggle in the calculator lets you pick whichever basis your deal uses. Just don't mix them up, applying an SDE multiple to an EBITDA figure understates the value.

Once you've got a valuation in mind, the next question is whether it cash flows. An SBA 7(a) acquisition loan over 350,000 prices around 9.5 to 9.75% right now (Prime is 6.75% in June 2026), runs a 10-year term, and asks for 10 to 15% down. Lenders want a debt service coverage ratio of at least 1.25x, and most prefer 1.35 to 1.50x. Run your number through the SBA calculator to see if the deal pays for itself.