How do I calculate how much my business is worth?

The most common approaches are: (1) EBITDA multiple — multiply adjusted EBITDA by your industry's median transaction multiple, typically 3–8× for small to mid-market businesses; (2) SDE multiple — for owner-operated businesses under $5M revenue, multiply seller's discretionary earnings by 2–4×; (3) Revenue multiple — most relevant for high-growth or SaaS businesses at 1–5× ARR; (4) DCF — discount projected future cash flows at your required return rate. Using 2–3 methods and averaging gives the most defensible estimate.

What is EBITDA and why is it used for business valuation?

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a proxy for operating cash flow that allows comparison across companies with different capital structures and tax situations. Buyers use EBITDA multiples because the multiple captures what a buyer is paying per dollar of sustainable operating profit, regardless of the deal structure (cash vs. debt financing). For acquisitions, adjusted EBITDA adds back owner compensation above market rate, one-time expenses, and personal items run through the business.

What is SDE (Seller's Discretionary Earnings)?

SDE is the total financial benefit to a single owner-operator, including net profit, owner's salary, owner benefits and personal expenses run through the business, depreciation, interest, and one-time items. SDE is used for valuing small businesses (under $2–5M revenue) where the owner manages day-to-day operations. It represents what a new owner-operator would earn. SDE multiples typically range from 2–4× depending on business size, growth, and industry.

What EBITDA multiple should I use for my business?

EBITDA multiples vary by industry, size, growth rate, and market conditions. Small businesses under $1M EBITDA typically trade at 2–4× EBITDA; mid-market companies ($1–10M EBITDA) often see 5–8×; larger companies command 8–12×+. SaaS businesses with strong recurring revenue and growth trade at premiums. Use recent comparable transactions in your industry — BizBuySell, IBBA market data, or your M&A advisor's deal database are the most reliable sources.

How do I prepare my business for a higher exit multiple?

The factors that most increase acquisition multiples are: recurring revenue (subscriptions vs. one-time sales), revenue growth trajectory, customer concentration below 20% with any single customer, documented systems and processes that allow the business to run without the owner, clean and audited financials for 3+ years, and a defensible competitive moat (brand, IP, or switching costs). Buyers pay premiums for predictability, scalability, and reduced dependency on the founding owner.

Business Exit & Acquisition Valuation Calculator for 2026

Calculate your business exit value using multiple methods: EBITDA multiples, SDE, revenue multiples, and discounted cash flow (DCF).

Financial Performance

Annual Revenue ($)

EBITDA ($)

Seller's Discretionary Earnings ($)

Valuation Multiples

EBITDA Multiple (×)

SDE Multiple (×)

Revenue Multiple (×)

Display Currency

Business Exit & Acquisition Valuation Calculator

Enter your revenue, EBITDA, SDE, and industry multiples to estimate your business exit value.

Mathematical Audit

How Business Exit Valuations Are Calculated

Business valuation uses multiple methods to triangulate a range. The EBITDA multiple method is most common for mid-market M&A, while SDE multiples are standard for small business transactions.

EBITDA Valuation = EBITDA × Industry EBITDA Multiple

SDE Valuation = Seller's Discretionary Earnings × SDE Multiple

Revenue Valuation = Annual Revenue × Revenue Multiple

DCF Valuation = Σ (Annual Cash Flow ÷ (1 + Discount Rate)^Year)

Blended Valuation = Average of All Applicable Methods

EBITDA multiples for small businesses range from 2–5× (under $1M EBITDA) to 5–10×+ for mid-market. SDE multiples for Main Street businesses typically run 2–4×. Revenue multiples vary 0.5–2× for traditional businesses and 3–10×+ for SaaS. Use 2–3 methods and average for a defensible estimate.

Operational Guide

How to Use the Business Exit Valuation Calculator

Enter Annual Revenue

Trailing twelve months (TTM) revenue. Use the most recent full fiscal year if TTM is unavailable.

Enter EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization — your operating profit add-back. Add back owner salary above market rate, personal expenses, and one-time items to get 'adjusted EBITDA'.

Enter SDE (Seller's Discretionary Earnings)

Net profit plus owner compensation, depreciation, interest, and personal expenses run through the business. SDE is used for businesses under $2M in revenue where the owner is operator.

Set industry multiples

Use your industry benchmarks or accept the defaults. M&A advisors, business brokers, and databases like BizBuySell publish median multiples by industry.

Review blended valuation range

Compare all three methods to see the valuation range. The blended average is a reasonable midpoint for negotiation.

Real-World Scenario Example

"A SaaS company with $2M ARR, $400K EBITDA, 3× SDE ($600K SDE), 5× EBITDA multiple, 4× revenue multiple."

Inputs

annualRevenue:2000000

ebitda:400000

sde:600000

ebitdaMultiple:5

revenueMultiple:4

sdeMultiple:3

Result

EBITDA Valuation = $2M, Revenue Valuation = $8M, SDE Valuation = $1.8M, Blended Average = $3.93M.

Important Disclaimer

Business valuations are estimates for planning purposes only and do not constitute a formal business appraisal. Actual transaction values will be negotiated based on due diligence findings, market conditions, deal structure, and buyer motivations. Consult a certified business valuator (CBV) or M&A advisor before making exit decisions.

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Sources & References

IBBA — Industry Research & Market Pulse Survey

https://www.ibba.org/resource-center/industry-research/

NetSuite — How to Use Valuation Multiples to Compare Your Business

https://www.netsuite.com/portal/resource/articles/financial-management/valuation-multiples.shtml

Calculator Inputs

Calculation Results

Business Exit & Acquisition Valuation Calculator

How Business Exit Valuations Are Calculated

How to Use the Business Exit Valuation Calculator

Enter Annual Revenue

Enter EBITDA

Enter SDE (Seller's Discretionary Earnings)

Set industry multiples

Review blended valuation range

Real-World Scenario Example

Important Disclaimer

How do I calculate how much my business is worth?

What is EBITDA and why is it used for business valuation?

What is SDE (Seller's Discretionary Earnings)?

What EBITDA multiple should I use for my business?

How do I prepare my business for a higher exit multiple?

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Sources & References

Calculator Inputs

Calculation Results

Business Exit & Acquisition Valuation Calculator