Business Valuation Calculator
What is your biz worth? A full valuation costs real money. This tool gives a plain first look.
Yearly profit times a multiple based on your biz type. That is the whole idea.
This is a rough first look, not a formal valuation. Assets, debts and risk all move the real price.
How to use this tool
- 1Yearly profit times the multiple gives a base value.
- 2The low and high rows show a fair talking range.
- 3Pick a multiple that matches your risk and how steady your sales are.
The math behind it
Value = yearly profit x multiplier
A business clearing 80,000 a year at a 2.5 multiple values at 200,000.
The multiple moves with risk, growth and how much the owner must work.
Who this tool is for
I watch which tools folk open most, and this one gets used by the same kinds of people again and again. If any of these sound like you, you are in the right place.
- Owners thinking about a sale some day
- Buyers sanity checking an asking price
- Folk curious what their side biz is worth
A pal sold his shop for less than he hoped and more than it deserved, he says now. The truth is in the middle. Valuation is a range, not a fact. This tool gives you the honest starting range so you walk in to any talk with a number that has a spine.
Tips from me
- Use real, provable profit. Buyers will check every line twice.
- Small owner run shops often trade at one to three times profit. Bigger, smoother firms run higher.
- Cut owner perks from the profit line before you value. Buyers pay for the business, not your car.
Mistakes I see with this sum
These are the three slips I made my self or watch folk make most. Skip them and your number will be closer to the truth on the first try.
- 1Using revenue instead of profit. Buyers buy profit, not buzz.
- 2Forgetting debts the buyer takes on. They come off the top.
- 3Treating the multiple as truth. It is a mood, and moods move with risk.
Two words worth knowing
Multiple
How many years of profit a buyer pays up front.
Owner earnings
Profit after your own pay is taken out first.
That is the whole page. The tool does the math, and the words above give it a shape. If a number still looks odd, change an input and watch what moves. Playing with the boxes taught me more than any guide did.
Common questions
+Why do bizs sell for a multiple of profit?
Buyers are buying future profit. The multiple says how many years of profit they will pay up front.
+Can I raise my value before a sale?
Often yes. Steady books, less owner dependance and repeat clients all lift the multiple buyers accept.
+What multiple should I use?
It swings by field, size and risk. Talk to a broker for your trade, then test the range here.
+Why is my business worth less than I hoped?
Usually one reason. Too much of the work lives in the owner. Systems and staff lift multiples.
+Is this a formal valuation?
No. It is a clean, simple estimate for planning. Real sales use pros, records and negotiation.