Business Valuation Calculator

The estimate is built in three moves.

Earnings. Enter your annual revenue, your EBITDA (earnings before interest, taxes, depreciation, and amortization), and any owner salary add-back. The tool values the business on SDE — seller's discretionary earnings — which is EBITDA plus the owner's salary added back, since a buyer either keeps that as profit or pays themselves instead.

The multiple. SDE is multiplied by a figure that starts from a base typical for small trades businesses and rises with recurring revenue, years in business, team size, and growth rate — everything that makes a business less risky and less dependent on the current owner.

Debt and assets. Enter outstanding liabilities and, optionally, your total assets. The tool subtracts debt from the enterprise value to show equity value — what you'd actually walk away with — and uses assets for an independent cross-check.

You own an electrical contracting company:

• Annual revenue: $2,000,000
• EBITDA: $350,000 (a 17.5% margin), with the owner already on a market salary, so there's nothing to add back — SDE = $350,000
• Recurring revenue: 30%
• Years in business: 15
• Technicians: 8
• Outstanding liabilities: $150,000
• Total assets (book value): $600,000

Step 1: The multiple. Starting from a 2.5× base, the profile adds for recurring revenue (30%), tenure (15 years), and team size (8 techs). Growth of 8% sits just under the threshold that would add more. That lands the multiple at 3.4× — squarely inside the 3.2–4.0× range typical for electrical contractors of this size.

Step 2: Enterprise value. $350,000 × 3.4 = $1,190,000, bracketed to a $952,000–$1,428,000 range, since any multiple estimate is a starting point rather than a fixed figure.

Step 3: Equity value. Subtract the $150,000 of debt: the mid estimate becomes $1,040,000 — the equity value, what's left for the owner after the business's liabilities are settled.

Step 4: Cross-check against assets. Book value is $600,000 in assets − $150,000 in liabilities = $450,000. That the earnings-based figure sits well above net asset value is the expected shape for a healthy, established business — it's worth more as a going concern than the sum of its equipment.

Knowing your company's value informs succession planning, mergers and acquisitions, investor talks, loan applications, and long-term planning. Even with no plans to sell, tracking the estimate year over year is one of the clearest measures of whether the business is actually growing.