What is my business worth? Free valuation calculator
A small business is worth what a financeable buyer will pay for its cash flow — in practice, a multiple of Seller's Discretionary Earnings (SDE). In BizBuySell's Q1 2026 Insight Report, the median closed sale ran at roughly 2.4× SDE (about 0.66× revenue), with a median sale price near $374,000. Enter your numbers below to get a defensible range, then check whether an SBA-financed buyer could actually afford it at today's rates.
Step 1 — Your earnings (last 12 months)
Step 2 — Add-backs (owner benefit)
Step 3 — Your industry
SBA financing reality check (mid-range price)
Estimate only, not an appraisal or an offer. Multiples are midpoints of published ranges for owner-operated main-street businesses; strategic buyers, real estate, inventory, and businesses over ~$2M in SDE trade differently. The Broker Index is not a financial advisor — validate pricing with a credentialed appraiser or a well-reviewed broker before listing.
How the math works — a worked example
Worked example — HVAC services company
Revenue $1.2M · net profit $150,000. Add back the owner's $90,000 salary + payroll costs, $25,000 of interest/depreciation, and a provable $15,000 one-time expense → SDE = $280,000. Home-service businesses typically trade at 2.2×–3.2× SDE, so the market range is $616,000–$896,000, midpoint ≈ $756,000. Financing check: a buyer putting 10% down borrows ~$680,000; at 10.25% over 10 years that's ~$109,000/yr of debt service. SDE minus a $60,000 replacement salary leaves $220,000 → DSCR ≈ 2.0, comfortably above the ~1.25 SBA lenders want. This price clears the bank — which is exactly why buyers would compete for it.
Two things kill deals at the pricing stage, and both show up in this calculator. First, unprovable add-backs: every dollar of add-back needs a paper trail, because a lender's underwriter will strike anything soft — see the add-back section in our guide to whether you can trust your M&A broker's valuation. Second, prices that fail the DSCR test: a broker who takes your listing at a flattering number that no bank will finance hasn't done you a favor, they've bought themselves a year of your exclusivity — the classic pattern in our piece on sellers burned by brokers.
Where these multiples come from
Multiple ranges here are drawn from published transaction data and broker fee guides: BizBuySell's quarterly Insight Reports (median sold multiples by quarter), Morgan & Westfield's valuation guides, and MidStreet's SDE multiple data. They're midpoints for healthy, transferable, owner-operated businesses; a business with declining revenue, heavy owner dependence, or one dominant customer trades below the bottom of its range, and one with management in place and clean books trades above the top.
FAQ
How do I calculate what my business is worth?
Compute SDE (net profit + owner compensation + interest/depreciation + provable one-time expenses), then multiply by your industry's SDE multiple — typically 1.5× to 4× for main-street businesses. The median closed sale in BizBuySell's Q1 2026 data ran about 2.4× SDE.
What counts as a legitimate add-back?
Owner salary and benefits, interest, depreciation, and expenses that are genuinely one-time or personal — each with documentation. Recurring "one-time" expenses, unpaid family labor, and below-market rent from a related landlord all get struck in diligence.
What is a good DSCR?
SBA lenders generally require ~1.25 or better after a market salary for the buyer. Below that, bank-financed buyers can't close at your price, which shrinks your buyer pool to cash buyers who expect a discount for exactly that reason.
Is this a formal appraisal?
No — it's a market-based starting range. For a defensible number in negotiations or litigation, hire a credentialed appraiser (CVA/ABV) or get a broker's opinion of value and stress-test it against this math.
Got a number? Now pick the right broker to defend it
Every broker on The Broker Index carries client ratings on transparency and command of the deal — check them before you sign a listing agreement.
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