Business Valuation Calculator
Estimate your business value using three methods: revenue multiple, EBITDA multiple, and asset-based (book value). Get a valuation range for selling, fundraising, or planning.
SaaS: 3–10x · eComm: 1–3x · Services: 0.5–1.5x
Earnings before interest, taxes, depreciation & amortization
Small biz: 3–5x · Mid-market: 5–8x · SaaS: 8–15x
How to Value a Business
Business valuation uses multiple methods that each answer a different question about value. No single method is universally correct — the right approach depends on your business type, stage, and the context of the valuation (sale, fundraise, partnership buyout).
The Three Valuation Methods
- Revenue Multiple: Best for high-growth or pre-profit businesses. Common for SaaS, media, and marketplaces where future revenue potential matters more than current earnings. Multiply annual recurring revenue (ARR) by an industry-appropriate multiple.
- EBITDA Multiple: Best for profitable, established businesses. EBITDA removes non-cash and financing costs to show true operational earnings. Multiply by a market-derived EBITDA multiple. Most private business acquisitions use this method.
- Asset-Based (Book Value): Best for asset-heavy businesses or distressed situations. Total assets minus total liabilities = net equity. Often used as a floor — a business worth less than its book value is usually in trouble.
Industry Valuation Multiples (2025/2026)
Revenue multiples: SaaS 3–10x (profitable SaaS 8–15x) · Ecommerce/DTC 1–3x · Agency/Services 0.5–1.5x · Content/Media 2–5x. EBITDA multiples: Small businesses under $1M EBITDA: 3–5x · $1M–$5M EBITDA: 4–7x · $5M+ EBITDA: 6–12x · High-growth SaaS: 10–20x+. These ranges shift with interest rates and market conditions — verify with current transaction data.
Frequently Asked Questions
What factors increase a business's valuation multiple?
Higher multiples come from: recurring revenue (subscriptions vs. one-time), strong year-over-year growth (especially 30%+), high gross margins, diversified customer base with no single customer over 15–20% of revenue, proprietary technology or IP, strong management team that doesn't depend on the founder, and proven scalability without proportional cost increases.
What is the difference between enterprise value and equity value?
Enterprise value (EV) is the total value of the business including debt — what a buyer would pay to acquire the whole company and assume its obligations. Equity value = Enterprise Value − Net Debt (debt minus cash). When you sell your business, you typically receive equity value. EBITDA multiples usually calculate enterprise value; subtract your outstanding debt to get your personal proceeds.
How does profitability affect valuation?
Profitable businesses generally command both higher absolute valuations and higher multiples because buyers are paying for current earnings streams, not just future potential. A business with 20% EBITDA margin and strong growth can see multiples 2–3x higher than the same revenue business with 5% margins. Use the Profit Margin Calculator to maximize your EBITDA margin before a sale process.
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