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Business Valuation Calculator

This calculator can help you estimate and better understand your business valuation.

Industry and Risk

What is the industry sector of your business?

Results are based on real market data gathered from over 3,000 businesses.

What are the odds of your business surviving the next five years?

Calculate your odds of survival with our Startup Risk Calculator.


Current Assets and Liabilities

What assets does your business have now?


What liabilities does your business have now?


Profits and Losses

How much revenue will your business produce this year?


How much profit (loss) will your business produce this year?


How much revenue will your business produce five years from now?


How much profit (loss) will your business produce five years from now?


Having an accurate grasp on how to value a small business is important for business owners and investors alike. If the business is raising a round of financing, for example, the pre-money valuation can have an impact on current terms and any future fundraising efforts, because raising a “down round,” or at a lower valuation than previously established, is a negative signal.

In the event of an acquisition, shareholders must feel comfortable selling their portion of the company at the bid price; the acquirer must also feel comfortable paying the asking price and the long-term value of their purchase.

Using our business valuation calculator, you’ll learn what considerations are factored into the valuation of your business. It’s worth noting, however, that business valuation calculations are only estimates and can be drastically different from the price someone will actually pay.

How to Calculate Business Valuation?

There are actually multiple ways to calculate the valuation of a business, and the answers derived from each method may differ substantially. This is what makes valuing a business more of an art than a science.

This doesn’t mean business valuations can’t be extremely accurate, it simply means that valuations are only arbitrary numbers until the market is willing to recognize that value in the price.

In this article, we cover three main methods of business valuation: discounted cash flow, book value, and comparable company analysis. Our business valuation calculator uses a combination of discounted cash flow analysis, book value, and comparable company analysis for a comprehensive valuation.

Business Valuation Methods

1. Discounted Cash Flow

When a business has predictable cash flow, discounting the present value of those future cash flows can give an accurate valuation of the business.

In theory, money today is worth more than money received tomorrow because of the ability to invest today’s money and receive interest income. The discount rate is a variable that must take into account the investors best judgement, growth rate, current interest rate, inflation rate, and more.

DCF Business Valuation Formula

DCF = [(CF1/1 + r)^1] + [(CF2/1 + r)^2] + [(CFn/1 + n)^n]

CFx = Cash Flow in year x
R = Discount rate
N = year

2. Book Value

A business’s book value valuation is essentially its net worth. Also known as the asset-based method for valuing a business, the formula is quite simple:

Book Value = Assets - Liabilities

While this figure can get complicated if seller discretionary earnings (SDE), liabilities to be assumed by the buyer, intangible assets, and other line items are added back in, this can be a very useful valuation formula for small businesses.

3. Comparable Company Analysis

Since startups and small businesses are privately owned, they are not subject to the same financial disclosures required of publicly traded companies.

One method of calculating the valuation of a privately held company is to determine the average valuation multiple being applied to publicly traded companies similar to the private company. Once the average valuation multiple is determined, it can be used to value the private company.

For example, if the average P/E ratio (price to earnings) in related public companies is 20x, you could discount this multiple to account for startup risk and apply this to the private company’s earnings to calculate a fair valuation.

If available, a better metric is comparable transaction analysis, or how much have similar private companies been acquired for. Although private market data isn’t as plentiful, there is usually some overlap between the private company’s valuation in question and the actual valuation of a recently purchased competitor.

This small business valuation calculator can help you estimate and better understand your business’s valuation. The comparable results are based on real market data gathered by EquityNet from thousands of businesses across North America.

EquityNet’s patented business analysis software, Enterprise Analyzer™, can provide a more detailed and in-depth analysis of your business to calculate the most accurate valuation possible.