Free business valuation calculator

Online business valuation calculator

Turn revenue, expenses, and owner add-backs into seller's discretionary earnings, then into a transparent valuation range.

SDE-based valuation

Estimate an online business valuation range

Calculate seller's discretionary earnings (SDE), then apply a multiple you choose, adjusted by four visible risk factors. This is not an appraisal.

How this business valuation calculator works

This business valuation calculator is built for small online businesses such as micro-SaaS products, content sites, and digital-product stores, where one owner does much of the work. It uses seller's discretionary earnings (SDE) multiplied by an earnings multiple:

  • SDE = annual revenue − annual expenses + owner add-backs
  • Adjusted multiple = starting multiple + factor adjustments (kept between 0.5× and 8×)
  • Base value = SDE × adjusted multiple; low and high use the multiple ±0.5×

Use trailing twelve-month figures. If the business is seasonal or changed sharply during the year, a single annual number can mislead; see the TTM revenue guide.

The assumptions, stated plainly

The starting multiple (3× by default) and every adjustment below are this calculator's own assumptions, chosen to make the direction of each risk visible. They are not market statistics. Replace the starting multiple with evidence from comparable sales whenever you have it.

  • Operating history: −0.5× under one year; +0.3× at three years or more.
  • Revenue trend: −0.5× if declining; +0.4× if growing; no change if flat.
  • Owner hours: −0.4× above 40 hours a week; +0.3× at 10 hours or less.
  • Revenue concentration: −0.5× if one customer or channel is 30% or more of revenue; +0.1× at 10% or less.

Worked example

A business with $180,000 of revenue, $120,000 of expenses (including $50,000 the owner pays themselves), and $50,000 of add-backs has SDE of $110,000. Three years old, flat revenue, 20 owner hours a week, and 15% concentration add +0.3× to the 3× starting point, giving 3.3× and a base value of $363,000, with a range of $308,000 to $418,000.

SDE vs EBITDA, and what buyers will check

SDE adds back the owner's pay because the buyer is expected to step into that role. EBITDA assumes a paid manager and is more common for larger businesses. The SDE vs EBITDA guide explains when each applies.

Buyers will try to verify revenue, expenses, and each add-back. Revenue confirmed from a connected payment provider is easier to trust than screenshots; a RevenueBug for-sale listing shows trailing 30-day revenue calculated from provider data. That is evidence of revenue, not an audit or a valuation. Before you list, read how to prepare a startup for sale.

Common valuation mistakes

  • Adding back costs a new owner would still have to pay.
  • Valuing on one strong month instead of a full year.
  • Ignoring dependence on one platform, ad channel, or customer.
  • Leaving out the owner's time: a business that needs 50 hours a week is partly a job.

Frequently asked questions

What is SDE?

Seller's discretionary earnings is the profit available to one full-time owner-operator: revenue minus operating expenses, with the owner's own pay and legitimate personal or one-time expenses added back. It is the usual earnings measure for small, owner-run online businesses.

What multiple should I use?

There is no single correct multiple. The calculator starts at 3× only as an editable placeholder. Look at recent comparable sales in your niche and size range, and adjust for the risks the calculator lists. Treat any published multiple as a range for a type of business, not a price for yours.

What counts as a legitimate add-back?

Common add-backs are the owner's salary and benefits, personal expenses run through the business, and genuinely one-time costs such as a past legal matter or a site rebuild. Recurring costs a new owner would still pay, such as contractors doing ongoing work, are not add-backs. Buyers will ask for evidence of each one.

Is this a formal appraisal?

No. It is an educational estimate based on your inputs and the calculator's stated assumptions. A formal valuation or a buyer's offer will rely on verified financial records, diligence findings, and deal terms.

When should I use an ARR multiple instead of SDE?

Larger recurring-revenue software businesses, especially fast-growing ones, are often discussed in revenue or ARR multiples. Small, profitable, owner-run businesses are more often priced on earnings. The SaaS valuation calculator models the ARR approach.

Sources and further reading