What is my business worth?

An estimate, not an appraisal

This range is a starting point for a conversation with your employee. It is not what a lender will lend against. An independent valuation by an accredited Qualified Source, prepared for the lender (not for the buyer or seller). If the price is above the valuation, the difference has to be made up with equity.

So if you and your employee agree on a price, expect the valuation to test it. What else to expect as the seller.

How the estimate works

• Earnings. Small businesses are usually priced on seller's discretionary earnings (SDE): what the business pays one full-time owner. If you only know your net income, add back your own salary and benefits, interest, depreciation and any one-time or personal costs the business paid.
• What businesses like yours sold for. We start from the range of multiples that businesses in your industry actually sold for, not what they were listed at, from BizBuySell's 5-year table of sold businesses (sales from mid-2021 to mid-2026).
• Size. Bigger businesses sell for higher multiples. In IBBA and M&A Source Market Pulse, Q2 2026, sold businesses averaged 2x under $500,000, 2.8x $500,000 to $1 million, 3.1x $1 million to $2 million. We move your range up or down to match.
• Two adjustments of our own. A business that runs without you day to day is worth more than one where everything goes through you, and a long track record is worth a little more than a short one. We move the multiple by a few tenths for each.
• A range, not a number. Two businesses with the same earnings can sell for different prices, so you get the low and high end for your industry, not one figure.
• Your employee's loan. A 10 year SBA 7(a) loan at our estimate rate. When your buyer has worked for you 2 years or more, SBA calls it an Owner Buyout and the lender may waive the down payment, so we show the loan covering the whole price plus the guaranty fee and starting closing costs, and what 10% down would be if the lender asks for it. Under 2 years, it is 10% of the whole project, the same math as our calculators. Debt coverage is your SDE divided by the yearly payments, against the 1.25 to 1 minimum.