Discover Your True Exit Value.
Stop guessing. Use institutional-grade SDE & EBITDA market multiples to calculate a defensible valuation for your specific industry.
Financials
$
Annual Profit
(SDE)
$
Margin: 0%
Risk & Operations
YoY Growth
10%
Customer Concentration
15%
% of revenue from top 3 clients.
Owner Independence
Low
%
%
Exit Simulation
Net Proceeds
Total Walk-Away Value
$0
Cash at Closing
Upfront payment minus debt
$0
Seller Financing (Note)
20%
$
$
Industry Specific Valuation
How do you value a Laundromat business?
Laundromats typically trade at 3.0x - 5.0x SDE. Key value drivers include the remaining lease term (10+ years is ideal), age of machines (newer equipment = higher multiple), card vs. coin systems, and whether the location is attended or unattended.
What is the valuation multiple for a Car Wash?
Multiples vary by type: Self-serve washes (2.5x-4.0x SDE), In-Bay Automatics (3.5x-5.0x SDE), and Express Tunnels (6.0x-9.0x EBITDA). Express tunnels command a premium due to high volume and monthly subscription revenue models.
How to value a Trucking or Logistics company?
Trucking businesses typically trade at 2.5x - 4.0x EBITDA. Asset-heavy businesses may be valued closer to the liquidation value of the fleet. Asset-light brokerages with recurring contracts command higher multiples (4.0x-6.0x) due to scalability and lower CapEx requirements.
How is a Liquor Store valued?
Liquor stores are very stable and often valued at a percentage of annual sales (e.g., 30-40% of Gross Sales) plus inventory at cost. Alternatively, they trade at 2.5x - 3.5x SDE. Location and state licensing laws significantly impact value.
Valuation of Daycare or Preschool centers?
Daycares trade at 2.5x - 4.0x SDE. Value is heavily driven by capacity utilization (occupancy %), state rating (stars), and location demographics. If real estate is included, it is valued separately from the business operations.
How to value an HVAC or Plumbing business?
HVAC and Plumbing businesses trade between 2.5x and 4.5x SDE. The highest valuations go to companies with a high percentage of recurring maintenance contracts (commercial or residential) versus those reliant on one-off installations. Technician retention is also a critical risk factor.
How are SaaS companies valued?
SaaS valuations are unique. Small SaaS (<$2M ARR) often trades on SDE/EBITDA multiples of 4x-7x. Larger, high-growth SaaS companies are valued on Revenue Multiples (ARR) ranging from 4x-10x+ Revenue, heavily dependent on Growth Rate and Net Revenue Retention (NRR).
What is a digital marketing agency worth?
Agencies typically trade at 2.0x - 3.5x SDE. They face lower multiples due to "Key Person Risk" (owner reliance) and client churn. Agencies with long-term retainer contracts and a diverse client base (no single client >15%) trade at the higher end.
How do you value an Amazon FBA or eCommerce brand?
eCommerce businesses trade at 2.5x - 4.5x SDE. Key drivers: Brand defensibility (proprietary products vs dropshipping), diversification (selling on own site vs just Amazon), and clean financial history. Dropshipping businesses typically see lower multiples (1.5x - 2.5x).
Dental Practice valuation metrics?
Dental practices are often valued as a percentage of collections (typically 60-80% of annual revenue) or 3.0x - 4.5x EBITDA. Modern equipment, a strong hygiene department (recurring revenue), and being in a non-saturated location increase value.
What is a Gym or Fitness Center worth?
Gyms trade at 2.5x - 4.0x SDE. Franchise gyms often trade higher due to brand recognition. Value is driven heavily by member retention rates, equipment condition, and the terms of the lease.
How to value a Property Management company?
Property Management is valued highly (3.0x - 5.0x SDE) because revenue is recurring and sticky. Alternatively, they are often valued at a multiple of monthly revenue (e.g., 12-18 months of gross revenue).
Landscaping business valuation rules of thumb?
Landscaping businesses trade at 2.2x - 3.5x SDE. Companies with commercial maintenance contracts trade much higher than residential design/build firms because the revenue is recurring and predictable.
What is a Manufacturing business worth?
Manufacturing businesses generally trade at 3.0x - 5.0x EBITDA. Key factors include proprietary products (IP), customer concentration (is 50% of rev from one client?), and the condition of machinery (CapEx requirements).
How much is a Coffee Shop worth?
Independent coffee shops trade at 2.0x - 3.0x SDE. Valuation is lower due to low barriers to entry and high competition. Location, lease terms, and foot traffic volume are the primary value drivers.
Financials & Accounting
Is Inventory included in the asking price?
Typically, no. For most retail, manufacturing, and eCommerce businesses, the asking price is usually stated as "Price + Inventory." The inventory value is calculated at landed cost (not retail price) on the day of closing.
How do I adjust for rent if I own the building?
If you own the real estate, your P&L might show zero rent or artificially high rent. To calculate SDE/EBITDA correctly, you must adjust the expenses to reflect a "Fair Market Rent" that a new buyer would have to pay to lease the space.
Should I use Cash or Accrual accounting?
Most small businesses run on Cash basis for taxes, but Accrual basis is preferred for valuation because it matches revenue with expenses more accurately. Buyers will often convert your Cash P&L to Accrual during Due Diligence to see true profitability.
What is FF&E?
FF&E stands for Furniture, Fixtures, and Equipment. This includes desks, computers, machinery, trucks, and shelving. In an asset sale, FF&E is typically included in the purchase price free and clear of debt.
What are "Add-backs"?
Add-backs are expenses added back to net profit to calculate SDE. Common add-backs include: Owner's salary, personal auto lease, personal travel, one-time legal fees, or non-recurring repair costs. They show the true earning power of the business.
What is Working Capital?
Working Capital is (Current Assets - Current Liabilities). In a business sale, a "target working capital" (usually inventory + AR - AP) is often included in the price to ensure the buyer has enough liquidity to operate on Day 1.
General Valuation Concepts
What is the difference between Asset Sale and Stock Sale?
In an Asset Sale (most common for small businesses), the buyer purchases assets (equipment, lists, goodwill) but not the legal entity or liabilities. In a Stock Sale, the buyer purchases the legal entity itself, assuming all assets and liabilities.
How does "Growth Rate" affect the multiple?
Growth is a massive value driver. A stagnant business might trade at 2.5x SDE, while the same business growing 30% YoY might trade at 4.5x SDE. Buyers pay a premium for the future cash flow potential.
Why does Customer Concentration lower value?
If a single client represents >15% of revenue, it creates a "Single Point of Failure." Buyers discount the valuation (often by 0.5x - 1.5x) to account for the risk that this client might leave post-acquisition.
Deal Process & Legal
How long does it take to sell a business?
On average, it takes 6 to 9 months to sell a business. This includes preparing financials, marketing the business, finding a buyer, due diligence (30-90 days), and closing.
What is Seller Financing?
Seller financing is when the seller acts as the bank, allowing the buyer to pay a portion of the purchase price over time (usually 3-5 years) with interest. Offering this can increase the final sale price and attract more buyers.
What is a Non-Compete Agreement?
A Non-Compete Agreement prevents the seller from opening a similar business or soliciting old clients for a set period (usually 3-5 years) within a specific geographic area. This is standard in almost all business sales.
What is Due Diligence?
Due Diligence is the "audit" phase after an offer is accepted. The buyer verifies your financials (bank statements vs tax returns), checks contracts, inspects equipment, and ensures there are no hidden legal liabilities.
What is an Earn-out?
An earn-out is a contingent payment structure where part of the purchase price is paid only if the business hits certain future performance targets (e.g., revenue or EBITDA goals) post-closing.
What is a Letter of Intent (LOI)?
An LOI is a formal document outlining the buyer's offer price and terms. It is typically non-binding regarding the sale itself but binding regarding confidentiality and exclusivity (no-shop clause) during due diligence.
How much do Business Brokers charge?
Business brokers typically charge a success fee of 10-12% of the final sale price for Main Street businesses (under $1M). For larger deals ($1M-$10M), fees often follow the "Lehman Formula" or a flat percentage like 8-10%.