How is my business valuation calculated?

The calculator starts with the EBITDA multiple range that lower-middle-market buyers currently pay in your industry, then adjusts it for company size, growth trend, recurring revenue, customer concentration, and how dependent the business is on its owner. Your adjusted EBITDA (reported EBITDA plus normalizing add-backs) multiplied by that adjusted range produces the low, midpoint, and high estimates.

What is a typical EBITDA multiple for a private business?

Most lower-middle-market businesses sell for roughly 4x to 8x EBITDA. Businesses under about $2M in earnings typically trade lower on a multiple of seller's discretionary earnings, while companies above $3M EBITDA in attractive industries can command high-single-digit multiples. Industry, growth, recurring revenue, and customer concentration move the number significantly in both directions.

Is this a formal valuation?

No. It is a market-based estimate built on published transaction multiples, intended to give an owner a realistic starting range. A formal valuation or a real market process considers quality of earnings, working capital, deal structure, and buyer competition, all of which can move the final number.

What are add-backs and why do they matter?

Add-backs are expenses a buyer would not inherit, such as above-market owner compensation, one-time costs, and personal expenses run through the business. They are added to reported EBITDA to produce adjusted EBITDA, the number the multiple is actually applied to, so legitimate add-backs increase the valuation dollar for dollar times the multiple.

Free valuation calculator

What is your business actually worth?

Get an instant valuation range built on the EBITDA multiples buyers are paying in your industry right now — and see exactly what’s raising or lowering your number. No email required to see your range.

Industry

Annual revenue

Annual EBITDA (profit)

Under ~$1.5M in profit? Most buyers price on SDE — your profit plus your own salary and benefits.

Revenue trend, last 3 years

Recurring or repeat revenue

Largest customer

How dependent is the business on you?

Add owner adjustments (add-backs) — these raise your number

Owner pay above market rate

One-time expenses this year

Personal expenses in the business

Instant estimate. Nothing is stored and no email is required to see your range.

Your estimated market value

Conservative

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Midpoint

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Strong process

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Working in your favor

Holding your number down

Get the full valuation analysis (PDF)

The free report shows the work behind your number — and what most owners never see until they’re deep in a deal:

Your adjusted EBITDA build-up, the number buyers actually apply a multiple to
The multiple math: your industry’s benchmark range and every adjustment applied to it
A value-driver scorecard with the specific moves that raise each rating
What you’d likely keep after fees and taxes under a strategic sale, a private equity sale, and an Independent Buyout
A 12–24 month preparation checklist if a sale may be in your future

How this calculator works

Private companies are priced as a multiple of earnings. For most businesses above roughly $1.5M in profit, that means a multiple of EBITDA — earnings before interest, taxes, depreciation, and amortization. Smaller companies usually trade on SDE (seller’s discretionary earnings), which adds the owner’s salary and benefits back to profit.

This calculator starts with the multiple range that lower-middle-market buyers are currently paying in your industry — drawn from published transaction data across market reports such as the IBBA Market Pulse and GF Data — and then adjusts it the way a buyer would:

Size. Larger earnings command higher multiples. A $10M-EBITDA company routinely trades 2+ turns above a $2M-EBITDA company in the same industry.
Growth. Buyers pay for the future, not the past. Sustained 15%+ growth adds real multiple; decline subtracts more than growth adds.
Recurring revenue. Contracted and repeat revenue is the single most reliable multiple-expander across industries.
Customer concentration. A customer above 25% of revenue is the most common reason deals re-price in diligence.
Owner dependence. A business that runs without its owner is worth more than one that is its owner.

Your adjusted EBITDA — reported profit plus legitimate add-backs — multiplied by the adjusted range produces your estimate. It is a market-based starting point, not a formal valuation: a real process with competing buyers, clean quality of earnings, and the right deal structure moves the final number, sometimes substantially.

Worth more than you think — or less than you need?

Either way, the multiple is only half the story. The structure of the deal decides what you actually keep — and who controls the company afterward. Before you talk to any buyer, it’s worth understanding how private equity firms value a company, how an Independent Buyout compares to a PE sale on the same numbers, and every real exit option on the table. If you’re earlier in the process, start with our step-by-step exit planning guide.

Frequently asked questions

How accurate is this estimate?: It reflects the multiple ranges real buyers are paying for companies like yours, so it’s a realistic starting range — but it can’t see your customer contracts, margins by line, or the quality of your books. Treat it as the beginning of the conversation, not an appraisal or an offer.
Do you store my financial inputs?: The instant estimate runs entirely in your browser and nothing is stored. If you request the PDF, we receive your contact details and the summary figures in your report so an advisor can follow up intelligently.
Why do buyers use EBITDA instead of revenue?: Because debt service and returns are paid out of cash flow, not revenue. Two companies with identical revenue can be worth wildly different amounts depending on what falls to the bottom line — which is also why legitimate add-backs matter so much.
What if my company is worth enough to retire on — but I don’t want to sell to private equity?: That’s the exact situation the Independent Buyout exists for: liquidity and valuation comparable to a PE deal, without handing control of the company to an outside sponsor.