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Davos Systems

Free business valuation calculator

A rough range for what your business is worth.

Type in last year's numbers. See gross profit, EBITDA, SDE and the value range a broker would start from. Nothing is stored.

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1× to 4× is a common broker range for small businesses.1

Rough value at 2.5× SDE

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Fill in the required fields to see it.

Gross profit
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EBITDA
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SDE
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Tangible assets (not in the multiple)
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A rough guide, not an appraisal. An appraiser or a business broker gives you a real number.

How the number is built

Four subtractions and one multiplication. The same first pass a broker makes.

  1. Gross profit

    Revenue minus cost of sales. What is left after the materials, subcontractors and direct labor that each job consumed.

  2. EBITDA

    Gross profit minus overhead, with depreciation, amortization and interest added back if they sat inside that overhead. Rent, insurance, office staff and marketing stay out.

  3. SDE

    EBITDA plus the salary and benefits the business paid you. A buyer who runs the business themselves gets that money too, so brokers count it as earnings.

  4. The range

    SDE times a multiple. The slider runs from 1× to 4×, a common broker range for small businesses. Where you land inside it depends on the trade, how much runs without you, and how clean the books are.

1 The 1× to 4× span is the range small-business brokers commonly quote for SDE multiples. It is not a Davos Systems figure and is not drawn from our customers. Your trade, size and location move it.

Questions

What is SDE?

Seller's discretionary earnings: the profit of the business plus everything the owner takes out of it in salary, benefits and perks. It answers the question a buyer asks first: if I bought this and ran it myself, how much would I take home?

What is EBITDA?

Earnings before interest, taxes, depreciation and amortization. It strips out financing and accounting charges so two businesses with different loans and equipment schedules can be compared on what they earn from operating.

Why a range and not one number?

Two businesses with the same SDE sell at different prices. One runs on the owner's phone and reputation; the other has crews, systems and a lead flow that keep going when the owner is away. The multiple is where a buyer prices that difference, so the tool shows the whole span.

Does the tool store anything?

No. The arithmetic runs in your browser. Nothing you type is sent to us or saved anywhere.

Who should do a real valuation?

A certified business appraiser if you need a number that holds up for a sale, a divorce, a partner buyout or the IRS. A business broker if you are thinking about selling and want a market opinion. Both will look at three years of returns, not one line of inputs.

A buyer looks at your site before your books.

Anyone sizing up a business checks its website and its Google reviews first. Sites and Reviews keep both current, so what a buyer sees matches what the business earns.

See pricingBook a call

Or call (470) 824-5540