What would your business sell for?

How the number is worked out

Estimated sale price = SDE × applied multiple, shown as a ±10% range. Three parts, each with its source:

1 · SDE, per the IBBA definition

Seller’s Discretionary Earnings is the standard earnings measure for owner-operated businesses, as defined by the International Business Brokers Association’s glossary: earnings before income taxes, interest, depreciation and amortization, non-operating and non-recurring items, and one owner’s entire compensation. The worksheet above computes it as pre-tax net profit, plus one owner's total compensation, interest expense, depreciation & amortization, one-time, non-recurring expenses, personal expenses run through the business, minus one-time, non-recurring income. Only one owner’s compensation is added back — additional working owners count at what it would cost to replace them.

2 · The base multiple, from published transaction data

Every industry multiple in the menu is transcribed from BizBuySell’s Business Valuation Multiples by Industry, which aggregates reported sales of small businesses over a trailing five-year window — currently businesses sold Q3 2021 – Q2 2026, updated biannually. Multiples are averages of sale price ÷ reported SDE across those transactions. 80% of businesses in the source data set sold between $50,000 and $2,000,000 — the “main street” segment. No multiple on this site is a rule of thumb.

3 · Factor adjustments — our stated assumptions

The value drivers (owner dependence, operating history, revenue trend, quality of books, premises, customer concentration) are the standard qualitative factors business brokers assess. The weights below are MainStreetWorth’s own stated assumptions — not published constants — and every one is shown in your breakdown, so you can discount any you disagree with:

• How the business runs without you. I run day-to-day operations myself (−0.20×) · I manage it, but staff handle daily operations (no change) · A manager runs it — I'm mostly hands-off (+0.20×)
• Years under current ownership. Under 3 years (−0.15×) · 3–10 years (no change) · More than 10 years (+0.10×)
• Revenue trend over the last 3 years. Declining (−0.25×) · Roughly flat (no change) · Growing (+0.15×)
• Financial records. Clean books — tax returns match the P&L (+0.10×) · Mostly documented, some gaps (no change) · Significant unreported cash (−0.30×)
• Premises & lease. Transferable lease with 3+ years left (or premises owned) (+0.10×) · Lease with 1–3 years left (no change) · Under a year left, or month-to-month (−0.15×) · No fixed premises (mobile or home-based) (no change)
• Customer base. Diversified — no customer is over 10% of revenue (+0.05×) · Somewhere in between (no change) · A few customers make up most of revenue (−0.20×)

Assumptions & limits

• The final range is the midpoint ±10% — a stated assumption reflecting that even a well-grounded multiple is a starting range, not a price.
• The applied multiple is floored at 0.5×. Below that, businesses are usually priced on assets, not earnings, and this method stops applying — as it also does whenever SDE isn’t positive.
• Multiples are national averages over five years of sales. Local market strength, timing, and deal structure (SBA financing, seller notes, earnouts) all move real outcomes.
• The estimate prices the operating business. Saleable inventory and owned real estate are typically negotiated on top of, or separately from, this number.
• The SDE method fits owner-operated Main Street businesses. Larger companies with management in place trade on EBITDA multiples instead, which this tool does not model.

Sources: IBBA glossary (SDE definition) · BizBuySell valuation multiples (businesses sold Q3 2021 – Q2 2026)
Last reviewed: July 2026. This calculator is informational only and is not professional, financial, or valuation advice.