A range is the honest answer
Two businesses with identical earnings routinely sell twenty or thirty percent apart. The buyer pool, the deal terms, how badly the seller needs out, whether the buyer is a competitor or a first-time owner — none of that fits in a calculator. Treat the midpoint as a starting hypothesis, not a price.
Earnings matter more than revenue
Buyers of small businesses are buying cash flow, not sales. A business doing $3M in revenue with $150K of owner earnings is usually worth less than one doing $900K with $300K. Revenue only enters this estimate as a cross-check — if the two numbers disagree sharply, your margins are unusual for your industry and that itself is worth a conversation.
What actually moves the multiple
Owner dependence is the biggest single lever for most small businesses. If the relationships, the estimating, or the technical work all live in your head, a buyer is purchasing a job with risk attached. Documented processes and a second-in-command change the conversation more than another year of growth does.
Customer concentration gets punished hard. One client at 40% of revenue means a buyer is underwriting the chance that client leaves after closing. Below roughly 15% it stops being a discussion.
Recurring revenue is the cleanest premium available. Contracts, retainers, and subscriptions convert a guess about next year into something a lender will finance, and financeable businesses attract more bidders.
Clean books don't add value so much as protect it. Deals die in due diligence when the numbers on the tax return can't be reconciled to the bank statements. Three years of tidy, reviewable financials is table stakes above a certain size.
Size has its own premium
Larger businesses sell for more per dollar of earnings, not just more in total. A business with $200K of earnings might trade at 2.2x while a near-identical one with $1.5M trades above 3x, and above roughly $2M of EBITDA the buyer pool shifts to private equity and multiples step up again into the 5x–7x range. Growing earnings therefore raises value twice — once through the earnings and once through the multiple.
What this estimate leaves out
This is an estimate of enterprise value, roughly what the operating business is worth. It does not account for the debt you'd pay off at closing, the working capital a buyer expects you to leave behind, real estate you own separately, or the deal structure — most small business sales include seller financing or an earnout, and a headline price with 40% contingent on future performance is not the same as cash at closing. It also assumes your earnings are sustainable and defensible. A real valuation looks at three to five years of financials, not one.
Most owners find out too late what their business is worth.
The gap between this number and what you need for retirement is the thing worth knowing now, while there's still time to close it. That usually takes a few years of deliberate work, not a listing.
This calculator is provided by Cool Wealth Management for educational purposes only. It is not a business valuation, an appraisal, a fairness opinion, or a recommendation to buy or sell any business, and it must not be relied upon for tax reporting, litigation, financing, estate planning, or any transaction. A defensible valuation requires a credentialed appraiser reviewing several years of financial statements, tax returns, contracts, and industry conditions.
The industry baseline multiples are drawn from BizBuySell's reported medians for businesses sold from the third quarter of 2021 through the second quarter of 2026, a dataset in which the median business sold for approximately $340,000 and eighty percent sold between $50,000 and $2,000,000. Those medians describe completed transactions of small, owner-operated businesses; they are not a forecast, and a particular business may sell well outside the indicated range or not sell at all. Adjustments for size, owner dependence, customer concentration, recurring revenue, growth, records quality, and tenure reflect general market convention rather than any specific published dataset, and reasonable professionals would weight them differently.
The estimate is expressed as enterprise value on a debt-free basis. It excludes outstanding debt, required working capital, owned real estate, non-operating assets, taxes arising from a sale, transaction costs, and the effect of deal structure including seller financing, earnouts, and escrow. It assumes reported earnings are accurate and sustainable, that add-backs would survive a buyer's scrutiny, and that a willing buyer exists.
Cool Wealth Management is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Cool Wealth Management and its representatives are properly licensed or exempt from licensure. Nothing here is personalized advice.