Business Valuation Calculator

Your business is worth its earnings times a multiple. That is the whole formula. For a small owner run business the earnings figure is SDE, seller's discretionary earnings, which is your net profit with your own salary and perks added back. The multiple is set by your industry, your size and how much of the business is you.

Across 2,117 US businesses that changed hands in the second quarter of 2026, the average multiple of cash flow was 2.7. That is the real anchor. Most sellers expect 5.

BizBuySell tracks closed deals, not asking prices. That is why it is the number to trust. Its Q2 2026 report covers April to June and 2,117 completed sales worth $1.8 billion.

The median business sold for $349,250. It had $692,087 of revenue and $155,921 of cash flow. That works out to an average cash flow multiple of 2.7 and an average revenue multiple of 0.7. One note on reading it, those multiples are averages while the dollar figures are medians, so do not call the 2.7 a median.

Sale prices split hard by sector. Manufacturing led at $704,500 and took 247 days to close. Service businesses came in at $350,000 and made up 40 percent of every deal done. Retail sat at $250,000. Restaurants sold for $205,000.

Subsector multiples get more useful, though the published table still covers full year 2025. Auto repair 2.70 times cash flow. Bakeries 2.68. Landscaping 2.56. Cleaning businesses 2.30. Hair salons 2.18. Some assets run far above the average because they need little of your time. Laundromats price at 3 to 5 times yearly net, which our laundromat guide breaks down.

An ecommerce store or a content site is priced against a different set of comps. Empire Flippers publishes a live scoreboard of its own closed deals, and it quotes multiples of MONTHLY net profit, not annual. Check the unit. Miss it and you are out by a factor of twelve.

On its trailing twelve months to July 2026, a typical business sold at 26.4 times monthly profit. Premium businesses reached 28.4. Businesses above $1 million hit 36.7. Distressed ones went for 14.5. Divide by twelve and those become 2.20, 2.37, 3.06 and 1.21 times annual profit.

SaaS earns a real premium. Acquire.com's report on 2025 closed deals puts the median SaaS profit multiple at 3.9 times annual profit, steady across 2024 and 2025.

Flippa says something more conservative than its own marketing. Its help centre tells sellers to start at 2 to 2.5 times annual net profit. Its blog quotes SaaS at 6.13 and ecommerce at 3.98. Those blog figures read as top quartile and one of the tables cites a third party rather than Flippa's own deals. We use the help centre number.

Three datasets. Three ways of measuring. All of them land between 2 and 3 times earnings, and that agreement is the most useful fact on this page.

SDE is for businesses under about $5 million. EBITDA is for the ones above it. The difference is one salary. SDE assumes a buyer will run the business themselves, so your compensation comes back into earnings. EBITDA assumes a hired manager, so it does not.

Start with net profit from your tax return. Add back your own salary and payroll taxes. Add back interest, depreciation and amortization. Add back one time costs that will not repeat for the buyer, a legal settlement, a rebrand, a flood. Add back genuine personal expenses running through the business, the car, the phone, the family health plan.

Then stop. Do not add back a salary for a manager who will still be needed, or marketing you cut last year to flatter the numbers. Buyers rebuild your add-back schedule from the bank statements, and every one they reject costs you the multiple times that amount. A $10,000 add-back thrown out at a 2.7 multiple is $27,000 off your price.

Six things decide where you land inside the band. Owner dependence is the big one. If the business needs you in it every day, you are selling yourself a job, not an asset, and the multiple drops.

Customer concentration is next. One client at 40 percent of revenue is a risk the buyer prices in. Clean books come third. Buyers who cannot verify your numbers discount them, and lenders will not fund what they cannot see. After that come growth, recurring revenue and age.

Be careful with the numbers you read on this. Plenty of broker sites will tell you concentration costs you exactly 0.5 to 2.0 turns of the multiple, or that recurring revenue above 70 percent adds a premium of 1.5 to 2.5 turns. No published dataset backs those figures. They are estimates dressed as measurements, so we do not repeat them.

What is measured is the distress gap. Empire Flippers closed distressed businesses at 14.5 times monthly profit against 26.4 for a typical one. Being forced to sell costs about 45 percent of the multiple. Sellers also close at 87 percent of asking price on average, so price with that haircut in mind.

Here is the part every other calculator leaves out. Take the median 2026 sale, $349,250.

First the broker. They charge 10 to 15 percent on deals up to about $1 million, and under $100,000 many take a flat $10,000 to $15,000 instead. At 10 percent that is $34,925 gone, leaving $314,325.

Now tax. You owe on the gain, not the sale price, so your basis matters. Say you built this business from nothing and your basis is $50,000. Your gain is about $264,325. Here the rate depends on the rest of your year. A married couple filing jointly in 2026 pays nothing on long term gains until taxable income passes $98,900, then 15 percent up to $613,700. If this couple has other income that already fills the nil rate band, the tax is roughly $39,649. With no other income at all, part of the gain falls in the zero band and the bill drops to about $24,814.

That leaves about $274,676. A $349,250 business put roughly $275,000 in the bank. Close to one dollar in five went to commission and tax, and that is before legal and accounting fees. Change the other income figure and that split moves, which is why the calculator above asks for it.

Two things can make it worse. In an asset sale the price gets allocated asset by asset, so inventory throws off ordinary income and depreciated equipment triggers recapture taxed as ordinary income, not at 15 percent. That is why buyers want asset sales and sellers want stock sales. The other is the 3.8 percent net investment income tax, which bites above $250,000 of income for joint filers. It usually spares an owner who actually ran the business, because the IRS treats that income as nonpassive.

None of this is tax advice. Your basis and your deal structure will move every number above, so run it past your accountant before you accept an offer.

Three routes, three cost structures.

A broker takes 10 to 15 percent. They earn it by finding buyers, screening them and holding the deal together. That suits a restaurant or a local service business.

An online marketplace suits a digital business. Flippa charges a listing fee and a success fee. Listing packages run $29 for a 60 day entry listing, $49 for a boosted or standard slot, and $199 to $599 for premium and ultimate tiers, with an NDA add-on at $199 on the lower tiers. On the success fee Flippa states only that fees start at 3 percent, and it does not publish a rate card. You will find blogs quoting 10 percent under $50,000 and 5 percent above $100,000. That tiering appears nowhere on Flippa's own site, so ask them in writing before you list. Worth knowing, listing fees come back in full if no qualified buyer contacts you within 30 days of going live. Flippa reports median closing times of 15 days under $50,000 and 73 days above $250,000.

Empire Flippers publishes its rate card. That is easier to plan against. It takes $10,000 flat up to $66,666, 15 percent to $700,000, 8 percent on the slice to $5 million and 2.5 percent above.

Selling direct costs no commission. It costs time instead. It works when you already know the buyer, a competitor, an employee or a family member. Expect to pay a lawyer properly, because you are doing the broker's job on the paperwork.