Business Valuation (Earnings Multiple) Estimator
Estimate small business enterprise valuation using Seller's Discretionary Earnings (SDE), EBITDA, or revenue multiples across conservative, median, and…
Calculation Formula
How to Use the Business Valuation (Earnings Multiple) Estimator
- 1 Enter Annual Net Profit / Seller's Discretionary Earnings (SDE) or EBITDA ($).
- 2 Enter Total Annual Gross Revenue ($).
- 3 Adjust the target Industry Multiple slider (typically 2.0x to 5.0x for small businesses).
- 4 Inspect estimated valuation ranges: Conservative (Base - 15%), Median (Target), and Aggressive (Base + 15%).
Methodology & Algorithmic Standards
Calculates Enterprise Value = SDE * Multiple, providing a three-tier sensitivity corridor based on small business M&A market transaction benchmarks.
Frequently Asked Questions
What is Seller's Discretionary Earnings (SDE)? ▼
SDE is the total financial benefit a single owner-operator derives from the business, including net profit, owner's salary, and discretionary personal expenses.
What multiple is typical for small tech or eCommerce businesses? ▼
Small profitable businesses typically trade between 2.5x and 4.5x SDE. High-growth SaaS businesses with recurring revenue often trade at 5x to 8x+ ARR.
Can I export this valuation memo? ▼
Yes. Click "Open in Notepad" to generate an executive valuation summary.
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