Business value

This calculator gives you a rough, back-of-envelope idea of what your business might be worth, based on how much profit it makes each year. It’s a quick starting point for a conversation — not a formal valuation.

It can help you answer questions like:

• Roughly what could I expect if I sold the business one day?
• Is the business becoming more valuable as profit grows?
• What would a buyer or investor likely offer, in broad terms?

What you’ll need to enter:

• Annual revenue — your total sales for the year, before costs. (Example: $300,000.)
• Annual profit — what’s left after all business costs, including a fair wage for yourself if you work in the business. (Example: $60,000.)
• Industry multiple — a number that reflects what similar businesses in your industry typically sell for, as a multiple of profit. Ask your bookkeeper or accountant what’s typical for your industry — 2 to 4 times profit is common for small service businesses. (Example: 3x.)

How it works
We simply multiply your annual profit by the multiple you enter, and also show a slightly lower and slightly higher estimate either side of it, since real-world offers usually land in a range rather than one exact number.

What the result tells you
With the example numbers, a $60,000 profit at a 3x multiple gives a rough value of around $180,000 (roughly $150,000 to $210,000 either side).

A few ways to use this calculator to think about growing the value of your business:

1. Focus on profit, not just revenue. A business with lower revenue but better profit is often worth more than one with high revenue and thin margins. Example: improving your profit margin by a few percent can lift your estimated value more than chasing extra sales at the same margin.
2. Keep clean, up-to-date books. A buyer (or a bank, if you’re borrowing against the business) will trust a number backed by proper bookkeeping far more than an estimate from memory.
3. Reduce reliance on you personally. A business that can run without the owner being hands-on every day is usually seen as less risky, and less risky often means a higher multiple.
4. Revisit this yearly. Tracking this estimate over time shows whether the changes you’re making are actually building value, not just revenue.

In short: this is a conversation-starter, not a contract price — use it to track direction, and get a professional valuation when a real decision is on the table.