How the business valuation calculator works
Start from normalized earnings (SDE for owner-operated businesses, EBITDA where management is in place) and a starting multiple you can evidence.
The model nudges the multiple up for growth above 10% and down for a largest customer above 15% of revenue and for owner dependence.
The range is ±15% around the base value, to reflect that valuation is a negotiation, not a single number.
How to read the result
- Treat the base value as a starting point for negotiation, not an appraisal.
- If the range is wide relative to your budget, test financing at the low and high ends in the deal analyzer.
- The adjustments are simplified illustrations; real buyers weigh many more factors.
Questions
Is this a formal valuation?
No. It is an educational estimate. A formal valuation or quality of earnings review is needed for lending, legal or tax purposes.
Which multiple should I start with?
Use multiples from comparable transactions you can evidence, on the same earnings basis (SDE vs EBITDA). See the multiples explainer.
Educational content, not advice. Bootstrapper.com publishes general information for education. It is not legal, tax, accounting, lending or investment advice and does not consider your circumstances. Calculator outputs are illustrative estimates. Rules, rates and programs change; confirm details with qualified professionals before making decisions.
Formulas are simplified and tested in an open test suite. Spotted an error? Email hello@bootstrapper.com.