Based on 9,500+ real U.S. business sales
How to Value a Small Business, The Broker WayIn 60 SecondsWith Real DataFor Free
The method is simple: SDE times a market multiple. The skill is using the right multiple. We use the ones deals actually close at.
How the number is calculated
How to value a small business in 3 steps: 1) compute SDE (net profit + owner salary + perks), 2) find the realistic market multiple for your industry and size (roughly 1.7x-3x for owner-operated businesses), 3) adjust for growth trend and years established. The calculator above does all three with real closed-deal benchmarks.
Small businesses sell for a multiple of SDE (seller's discretionary earnings): your profit plus your salary plus anything personal the business pays for. We apply realistic closed-deal multiples, adjusted for your growth trend, age, and size. Real transaction data. Not a guess.
This tool provides an educational estimate, not a formal appraisal or an offer. Actual sale prices depend on financials, transferability, and deal terms.
Questions, answered
How do you calculate what a business is worth?
Most small businesses sell for a multiple of SDE (seller's discretionary earnings): annual net profit plus the owner's salary plus personal expenses run through the business. Market multiples run roughly 1.7x to 3x SDE for owner-operated businesses, scaling higher with size. This calculator applies real closed-deal multiples by industry with size and trend adjustments.
What is SDE?
SDE stands for seller's discretionary earnings: the total financial benefit a single owner-operator gets from the business in a year. It is net profit plus the owner's salary plus perks like a vehicle, phone, health insurance, or travel the business pays for. Small businesses are priced as a multiple of SDE.
Why is my number lower than multiples I see published?
Published "average multiples" are dragged up by large deals. Real broker data (IBBA Market Pulse) shows businesses selling for under $500K have closed at a steady 2.0x SDE median for years. This calculator is calibrated to what businesses actually close at for their size, so the range you see is one you could realistically defend in a negotiation.