Business Valuation Calculator

Estimate what a business is worth using industry-specific cash flow multiples. Based on real transaction data from the FirstLook marketplace.

Business Valuation Estimator

Based on industry multiples from FirstLook marketplace data

Typical multiple range: 3x – 7x cash flow

Seller's Discretionary Earnings — net income + owner salary + add-backs

Established: 5+ years = standard valuation

Enter annual cash flow to see valuation estimate

Multiples based on FirstLook marketplace data. Actual valuations depend on many factors. Consult a professional appraiser for formal valuations.

How Business Valuation Works

Most small businesses are valued as a multiple of their annual cash flow (also called Seller's Discretionary Earnings or SDE). The multiple varies by industry, business age, growth trajectory, and owner dependency.

What Is SDE (Seller's Discretionary Earnings)?

SDE = Net Income + Owner's Salary + Owner Benefits + One-Time Expenses + Depreciation. This represents the total financial benefit to a single owner-operator. It's the standard metric for valuing businesses under $5M.

What Affects the Multiple?

  • Industry — SaaS businesses trade at 3-7x cash flow. Restaurants at 1.5-3.5x.
  • Age — 10+ year businesses command a 15% premium. Under 2 years get a 30% discount.
  • Owner dependency — If the business runs without the owner, the multiple increases.
  • Growth trend — Growing revenue commands higher multiples.
  • Customer concentration — If one customer is 50%+ of revenue, the multiple drops.

When to Use EBITDA Instead of SDE

For businesses with $1M+ in earnings or multiple owners, EBITDA multiples are standard. EBITDA multiples are typically 0.5-1.0x higher than SDE multiples because they don't add back the owner's salary.

Ready to Browse?

Use this calculator to estimate fair value, then browse AI-scored listings on FirstLook to find businesses trading at or below their estimated value.