Business Valuation Calculator
Estimate what your business is worth using both EBITDA and revenue multiples, then returns the higher of the two. Useful for sale negotiations, fundraising, or partner buyouts.
About this calculator
Business valuation by multiples applies a market-derived multiplier to a company's financial metrics to estimate its fair market value. This calculator uses two approaches and takes the greater result: Valuation = max(EBITDA × EBITDA multiple, Annual Revenue × Revenue multiple). EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) multiples reflect a company's earning power and are preferred for profitable businesses; industry EBITDA multiples typically range from 3× for low-margin sectors to 15×+ for high-growth technology firms. Revenue multiples are used when a business has minimal profit but strong top-line growth, common in early-stage SaaS or biotech. Taking the maximum of the two methods provides the most favorable defensible valuation, which is standard practice in M&A negotiations where sellers lead with the higher figure.
How to use
Imagine a manufacturing business with $2,000,000 annual revenue, $400,000 EBITDA, an industry EBITDA multiple of 5×, and a revenue multiple of 0.8×. Step 1 — EBITDA method: $400,000 × 5 = $2,000,000. Step 2 — Revenue method: $2,000,000 × 0.8 = $1,600,000. Step 3 — Take the maximum: max($2,000,000, $1,600,000) = $2,000,000. The estimated business valuation is $2,000,000. In this case the EBITDA method yields the higher value, which the seller would typically present to prospective buyers.
Frequently asked questions
What EBITDA multiple should I use to value my small business?
EBITDA multiples for small businesses (under $5M revenue) typically range from 2× to 5×, while mid-market companies often command 5×–10×. The precise multiple depends on industry, growth rate, customer concentration, and recurring revenue quality. A business with diversified customers, strong recurring contracts, and consistent growth warrants a premium multiple. Industry databases like BizBuySell or IBBA transaction reports publish median multiples by sector, which serve as reliable starting benchmarks before adjusting for company-specific factors.
When should I use a revenue multiple instead of an EBITDA multiple to value a business?
Revenue multiples are most appropriate when a company is pre-profit, investing heavily in growth, or in an industry where losses are structurally expected in the early years—such as SaaS startups, marketplaces, or biotech. They are also used when EBITDA is distorted by one-time charges or owner compensation adjustments that make the earnings figure unreliable. Revenue multiples for high-growth SaaS businesses can range from 3× to 15× annual recurring revenue. For stable, profitable businesses, EBITDA multiples generally produce a more accurate valuation because they reflect actual cash generation.
How does industry type affect business valuation multiples?
Industry is one of the most influential factors in determining valuation multiples because it signals growth potential, capital intensity, and risk profile. Technology and software companies attract the highest multiples—often 8×–20× EBITDA—due to scalability and recurring revenue. Capital-intensive industries like manufacturing or trucking typically trade at 3×–5× EBITDA because profits are harder to scale. Service businesses with high customer churn or key-person dependency receive lower multiples than those with contracted, recurring relationships. Always source multiples from recent comparable transactions in your specific industry subsector for the most accurate estimate.