This business valuation calculator is used to assist business owners to determine a range for what their business would sell for on the open market to a third party buyer.
HOW TO USE THIS CALCULATOR
1. Enter your revenue and expense numbers based on your last full years Profit & Loss statement in the Original Amount column of the Valuation Workbook tab. Add / change any expense descriptions or columns as necessary. Make no adjustments to these numbers or this column.
2. In the Add Back column, adjust your expenses as necessary. To do this, enter the negative sum of the total of the expense to be added back. Expenses should only be added back if they were of personal nature or a one time expense, and they should not be necessary to maintain ongoing business operations.
2a. Some examples of Add Back expenses: owner salary, owner payroll tax, owner health insurance (if you would not offer it to a manager), personal supplies purchased by business, depreciation, amortization, interest.
3. The adjusted expenses will automatically calculate and total the Adjusted Seller's Discretionary Earnings (SDE) which is used to determine the worth of most small businesses.
4. Our calculator will choose the appropriate industry multiples based on your chosen industry and will automatically calculate an estimate of the range for which your business would sell for on the external market.
This is not a formal business valuation nor a formal market price opinion. Transworld Business Advisors has not reviewed these statements, nor makes any representations that said business is worth any determined amount. Transworld Business Advisors has not independently reviewed or verified any of these statements.
Frequently Asked Questions
Why do you give me a range and not an exact value?
Using industry-accepted business valuation methods like the income approach, Transworld evaluates your business alongside current market and value factors to determine its fair market value. The fair market value of a company is the price a buyer is willing to pay on the open market for a company or what you can expect the company to sell for. The calculator can only measure financial performance, and not other factors such as organizational structure, goodwill, market position, and more. This is why we provide a range of values and work with you to analyze other factors before providing a Broker’s Opinion of Value (BOV).
What if I want a more precise number?
Determining the value of your business with a broker price opinion is the first step a business owner can take towards planning their strategic exit. After completing the valuation calculator, you’ll have a range of what your business is worth in hand. For a more precise number contact us to schedule a consultation with a business broker.
Where do you get the multiples?
Valuation multiples are incorporated into the Multiple of Discretionary Earnings income-based valuation method used at Transworld. These multiples are determined by a set of financial and operational factors as well as industry and similar business sales within those industries.
What if my industry is not listed?
If your industry is not listed, don’t worry it just may mean there is not as much historical data on past business sales. Contact us directly and we’ll work with you to develop a value for your business.
*Please note that inputted data points will be shared with Transworld Business Advisors LLC. All information will be kept confidential.