Small Business Valuation Calculator
Wondering what your company could be worth in a sale? Try out our free business valuation calculator. It’s easy, instant, and confidential. Simply input your information below, and receive an estimate of your business value.
Business Valuation Form
The Business Valuation Calculator Built with Experience
This business valuation calculator was developed after years of experience buying and selling small companies. After dozens of transactions, we realized there are common predictors of company value– such as a business’s trailing twelve months EBITDA and EBITDA margin. While these metrics are not foolproof, we have found them to reliably predict business value over the years. We based this business valuation calculator on the metrics that give the most accurate estimate of company value.
Please note that 1719 Partners is not a professional valuation firm and this calculator does not substitute a formal valuation.
No Strings Attached
Using this business valuation calculator is commitment-free. It does not bind you to selling or represent an offer from 1719 Partners.
Business Valuation Methods
There is more than one way to estimate business value. We elaborate on a few common methods below.
The EBITDA Multiple
This method values a business based upon a multiple of its EBITDA, or earnings before interest, taxes, depreciation and amortization. Once a company’s EBITDA is determined, a multiple is assigned that sets the valuation for the company. Many factors determine the multiple, such as if the business is a market leader or not, how competitive the industry is, and the company’s profitability and revenue. As you may expect, the higher the multiple, the better. Some industries— like technology, which generally has a high growth potential— have higher multiples on average than other industries.
Comparable Sales
Another valuation strategy is to base a purchase price on similar sales. This method relies upon the assumption that similar companies have similar valuation multiples, like the EBITDA multiple mentioned above.
Book Value
This valuation tactic is perhaps the most literal. It looks at a company’s total assets minus its total liabilities. It captures what a business would be worth, in theory, if all its assets were sold and all its debts were paid. Total liabilities is the sum of the company’s debts and other financial obligations, while total assets include both material and immaterial assets. For example, intellectual property would be a valuable immaterial asset, while real estate is physical.
Our Valuation Calculator: Driven by EBITDA, growth, margin, and other select metrics
Our experience interacting with business owners and their advisors over the years leads us to favor the EBITDA multiple valuation methodology over other methodologies like discounted cash flow and asset value. EBITDA multiple is one of the more simple calculations and is also readily accepted in the marketplace. While not perfect, it is a good initial screening tool and therefore we based our valuation calculator on this.
