This business valuation calculator is used to assist business owners to determine a range for what their business would sell for on the open market to a third party buyer.
| HOW TO USE THIS CALCULATOR |
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| 1. Enter your revenue and expense numbers based on your last full years Profit & Loss statement in the Original Amount column of the Valuation Workbook tab. Add / change any expense descriptions or columns as necessary. Make no adjustments to these numbers or this column. |
| 2. In the Add Back column, adjust your expenses as necessary. To do this, enter the negative sum of the total of the expense to be added back. Expenses should only be added back if they were of personal nature or a one time expense, and they should not be necessary to maintain ongoing business operations. |
| 2a. Some examples of Add Back expenses: owner salary, owner payroll tax, owner health insurance (if you would not offer it to a manager), personal supplies purchased by business, depreciation, amortization, interest. |
| 3. The adjusted expenses will automatically calculate and total the Adjusted Seller's Discretionary Earnings (SDE) which is used to determine the worth of most small businesses. |
| 4. Our calculator will choose the appropriate industry multiples based on your chosen industry and will automatically calculate an estimate of the range for which your business would sell for on the external market. |
This is not a formal business valuation nor a formal market price opinion. Transworld Business Advisors has not reviewed these statements, nor makes any representations that said business is worth any determined amount. Transworld Business Advisors has not independently reviewed or verified any of these statements.
Calculating the price for which a business would sell for is a complicated process, in order to determine a more precise value we need to know more about your business. Ultimately however, a business is only worth what a buyer is willing to pay. This tool is designed to help at least give you a starting point.
Companies that produce more than $250,000 in SDE and EBITDA are valued at a different, higher rate because of the increased returns the company produces for an owner. These valuations are often even more complicated.
If you need a more precise number for use to sell your business on the open market, contact us and we can perform a Market Price Opinion based on past sales history and current comps in your industry.
The multiples are obtained from an industry database that combines past sales data for small business transactions. They are a 'rule of thumb,' meaning that depending on each individual business and situation the actual value of the business may be higher or lower depending on many qualitative factors.
We purposely do not list some industries whose values are not based on SDE and based on other financial indicators like revenue, monthly cash flow, or client count. If your industry is not listed, you can use the general small business multiples or contact us for a review of your business.
*Please note that inputted data points will be shared with Transworld Business Advisors of Quebec LLC. All information will be kept confidential.
