Business Valuation Calculator

Valuing a small business usually begins with a rule of thumb: take what the business earns and multiply by what comparable companies changed hands for. The method is rough by design, but it brackets the conversation before lawyers and accountants arrive. This calculator applies an earnings multiple from realistic bands and runs a revenue multiple beside it, saying plainly where the arithmetic stops being reliable.

Enter values

Results

Valuation midpoint (earnings method): ₹30,00,000.00
Range from earnings: ₹20,00,000.00 – ₹40,00,000.00
Valuation midpoint (revenue method): ₹37,50,000.00
Range from revenue: ₹25,00,000.00 – ₹50,00,000.00

How is the Business Valuation calculated?

Enter annual earnings: seller's discretionary earnings for an owner-run business, or EBITDA when a management team stays on. Select the multiple band that fits — owner-dependent operations sit at the low end, recurring revenue and a second-in-command at the top. Enter revenue as well and a second valuation appears on revenue alone, so you can see whether the two methods land in the same neighbourhood.

Formula

Valuation = Earnings × Multiple, evaluated at both ends of the chosen band; the midpoint is the headline figure. Revenue valuation = Revenue × Revenue multiple, offered as a cross-check. Multiples track growth, margins and risk and are negotiated from comparable deals — no accounting rule fixes them, so industry and size shift them constantly.

Example

A packaging company earns ₹20,00,000 a year in seller's discretionary earnings. The 1×–2× band values it at ₹20,00,000 to ₹40,00,000, midpoint ₹30,00,000. Revenue is ₹50,00,000 and the selected 0.5×–1× band gives ₹25,00,000 to ₹50,00,000, midpoint ₹37,50,000. The overlap between ₹25,00,000 and ₹40,00,000 is the honest space in which to negotiate.

Things to remember

Use the midpoint to open a conversation, not to close one — a healthy business rarely changes hands at a single number. Adjust for what a multiple cannot see: customer concentration, lease terms and whether the owner's salary sits inside the earnings. When real money is at stake, pay for a proper valuation.

Frequently Asked Questions

How do I value a small business quickly?

Multiply annual earnings — usually seller's discretionary earnings or EBITDA — by a band drawn from comparable sales. An owner-run business earning ₹20,00,000 at 1×–2× is worth ₹20,00,000 to ₹40,00,000 before any discount or premium is argued over.

What multiple is my business worth?

Owner-dependent businesses with no management team often trade at 0.5×–1×, steady firms at 1×–2×, and businesses with recurring revenue, documented systems and growth at 3× or more. Margins, customer concentration and lease quality move the number inside those bands.

What is seller's discretionary earnings?

SDE is profit before one owner's salary, interest, tax and non-cash items — what a single owner effectively takes home each year. EBITDA is the same idea for a business that runs without its owner. Choosing the wrong measure for a company skews the entire valuation.

Can revenue be used to value a business?

Yes, as a cross-check: revenue multiples run from about 0.25× for thin-margin trading to 3× for software. Because revenue ignores costs, two shops with identical turnover but very different profits should not land on the same price.