What is the tool?

This tool is a free and simple calculator of business value based on analyzed data of thousands of bank financed transactions.

Who Should Use the Tool?

1. Business Owners looking to have a quick tool to gauge their business value as they grow their businesses.  Like watching your stock portfolio grow, build value in your business and track it!
2. Business consultants or coaches working with business owners to show how values may change after implementing strategies
3. Professional Business advisors such as Financial Planners, Accountants and Attorneys who want to have a third-party opinion of value
4. University Business Schools who want to educate their students about business values for different industries and sizes
5. Chamber of Commerce Organizations looking to provide useful resources to their business owner members

If you are an advisor, we encourage you to add the code below to a page on your website.  Adding the code to your website will allow your clients to go to a place on your company’s website to receive an objective third-party estimate of business value.

What are the parameters of the Tool?

This business value tool is designed for small businesses under $5M in revenue.  Actual transactions that were financed through lenders using the SBA are the source of the data.  Businesses larger in size will have different parameters and it is not recommended to use the tool for these companies.

Steps to calculate business value:

1. Select the industry that matches your business the closest
2. Enter your annual revenue.
3. Enter your Owner’s Discretionary Earnings.  It is extremely important that you calculate and enter your Owner’s Discretionary Earnings correctly as described here. Since these are bank financed transactions, only certain adjustments are considered when calculating Owner’s Discretionary Earnings.
4. Hit the Calculate button.


Does this tool eliminate the need for a certified business valuation?

Absolutely not.  A certified business valuation is necessary for all important situations involving a business owner such as financing, litigation, gifting, and business planning among many other reasons.  A business valuation is specific to your business while this tool provides an estimate based on transactions that have been financed that may or may not be similar.  Every business is unique so though this tool categorizes businesses by industry, revenue, and earnings, it does not take into account other aspects that may be unique to your business.