Business Valuation: Methods and Frameworks
Determining what a business is worth is a mix of art and science. Buyers and sellers rely on different valuation frameworks depending on company size, industry, and growth rates. Small businesses are often valued using a multiple of Seller's Discretionary Earnings (SDE), larger companies use a multiple of Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and high-growth companies are sometimes valued with a full Discounted Cash Flow (DCF) model that projects future cash flows and discounts them to present value.
This business valuation calculator produces a simplified, quick blended estimate using two multiple-based methods — a revenue multiple and a profit multiple — averaged together. It does not run a full SDE/EBITDA distinction, DCF projection, or net debt adjustment; treat it as a fast sanity check, and use the fuller methods described above (or a professional appraisal) before any real transaction. Comparing your estimate with the startup equity dilution simulator and the capital expenditure ROI calculator helps you understand how capital changes affect exit valuation.