What is my business worth?

Buyers pay for earnings.

For most small and mid-size firms, buyers start with what the business earns for its owner. Then they multiply it. That multiple depends on size, industry, and risk.

Seller's earnings, in plain words.

For smaller firms, the key number is seller's discretionary earnings, or SDE. It is your profit before your own pay. Then add back personal costs the business covers.

Think of a company car, a phone, or a family member on payroll who doesn't work there. Buyers add those back. A new owner won't have them.

For larger firms, buyers use EBITDA. In plain words, it is profit before loan costs, taxes, and wear on equipment. It assumes a paid manager runs the place.

The multiple.

Sale multiples in the second quarter of 2026, by business size:[13]

1. Under $500,000: about 2.0 times SDE
2. $500,000 to $1 million: about 2.8 times SDE
3. $1 million to $2 million: about 3.1 times SDE
4. $2 million to $5 million: about 4.0 times EBITDA
5. $5 million to $50 million: about 5.8 times EBITDA

In 2025, the median small business sold on one big listing site went for $350,000.[17]

An example.

Say your business earns $250,000 before your pay. It also pays $50,000 of your personal costs. Your SDE is $300,000.

At 2.5 to 3.0 times, the estimated value range is $750,000 to $900,000. Take off $100,000 of business debt. You have $650,000 to $800,000 before tax.

This is an estimate, not a formal valuation.

What moves the multiple.

Two businesses with the same earnings can sell for very different prices. Buyers pay more when:

1. The business runs well without the owner.
2. No single customer is a big share of sales.
3. The books are clean and easy to check.
4. There is a strong second in command.
5. Earnings are steady or growing.

The first one matters most. If the business can't run for two weeks without you, a buyer is buying a job. They will pay less, or ask you to stay on.

What owners often get wrong.

1. Using sales. Buyers pay for earnings, not sales.
2. Counting the future. Buyers pay for what the business earns today, with proof.
3. Forgetting debt and tax. The price is not what you keep. Debt comes off first, then tax.
4. Including the building. If you own the property, it is often valued and sold on its own.

Estimate versus formal valuation.

A quick estimate shows you the ballpark. A formal valuation is a full written report by a trained expert.

You may need one to sell to employees or family. You may also need one for a buy-sell agreement or a tax filing.

In the US, the law requires an outside expert to value ESOP shares every year.

Get your range in five minutes.

Our free 5-minute check asks short questions you can answer from memory. You see your estimated value range and the math behind it.

You also see which of six paths fits you, and the one gap that caps your price.