What is your business worth?

A valuation starts from normalized earnings. Owner compensation, one-time costs, and discretionary expenses are added back to net income to arrive at Seller's Discretionary Earnings, or at EBITDA where the business is large enough to run under professional management. That normalized figure, not the profit shown on a tax return, is what a buyer and a lender underwrite.

From there, value is established through the three approaches recognized in business valuation. The market approach applies a multiple drawn from comparable transactions to SDE or EBITDA, and it governs the majority of private company sales. The income approach, most often a discounted cash flow, values the projected earnings stream in present terms. The asset approach sets a floor, the net value of the assets themselves. A credible valuation reconciles all three rather than leaning on any one.

The multiple is not a constant. Customer concentration, owner dependence, the share of revenue that recurs, margin trajectory, and the quality of the financial records each move it materially, often by more than a full turn of earnings. This is why two businesses reporting identical profit can transact at very different prices, and why diligence-grade preparation, a Quality of Earnings analysis and a clean recast, belongs before the business reaches the market rather than after a buyer raises questions.

The calculator below applies these methods to your figures and returns a defensible range, along with the factors that drive it. It is a starting point, not an appraisal. The guides alongside it define each input and show where a number can be strengthened before a sale.