Business value calculator

This business value calculator is especially designed for small businesses and was created by our experts in an effort to help entrepreneurs who are thinking about selling their companies. To determine the fairest possible value of the business, a multiple of the profit is applied.

In general, small and medium-sized businesses trade with a profit multiple between 3x and 5x. The difference between the multiples is the result of a variety of characteristics specific to each business.

Thus, in addition to profit, the other indicators used by our calculator are related to expenses, the impact of major customers on revenue, pricing strategy, type of business, human resources structure in top management and the value of real estate.

The level of expenses is important when evaluating a business, because it indicates how much effort the new owner has to put in to keep the activity at least at the level it is now. A very high percentage of expenses can drastically decrease the attractiveness of a business! Moreover, the impact of major customers on revenue is another very important indicator for any buyer.

If most revenues are generated only by the first 3-5 customers, the company bears a major financial risk in case one of them withdraws.

Regarding the price strategy, selling premium products automatically means a smaller market. This strategy may not be to the liking of all buyers, despite the possibility of making higher profits from lower sales!

Similarly, a company that provides professional, B2B services can lead to difficulties in maintaining and enriching the client portfolio. The good part - contracts with other companies can bring substantial income.

Regarding the current management of the business, if the top people are essential for the activity, the attractiveness of your business will decrease, especially if none of them will stay at least a few months in the company, after the transfer.

Finally, a deal that also includes a real estate component may prove more attractive, as it eliminates the risk of business interruption due to the impossibility of transferring leases.

To see exactly what your business is worth, enter your financial and quality data in the fields below. You get the result directly on the site, for free!

What is your annual profit?

What is your annual profit?
What is the annual revenue growth rate? Enter a value between 0% and 50%
%
What is the profit margin as a percentage of revenue? Enter a value between 0% and 50%
%
Capital expenditures - funds used for the acquisition, modernization and maintenance of physical assets (as a percentage of income)? Enter a value between 0% and 30%
%
Percentage of revenues generated by the main client? Enter a value between 0% and 50%
%
The percentage of revenues generated by the top 5 customers together? Enter a value between 0% and 75%
%
Compared to the main competitors, does your business charge premium prices?
Is your business a B2B company? (accounting, advertising, etc.)
Are you and / or your business partners essential to running your business?
The value of real estate that is transferred with the business