What is my business worth?

How small businesses are actually valued

Buyers and their lenders price Main Street businesses on cash flow. The standard measure is seller's discretionary earnings (SDE): your net profit, plus your own salary and benefits, plus interest, depreciation, and any personal or one-time expenses you've run through the company. It's the total financial benefit one owner-operator gets from the business.

That number gets multiplied by a figure that reflects how safe and attractive the income is. A landscaping company with five crews, a trained manager, and 70 percent repeat customers might sell for 3x SDE. A restaurant where the owner is also the head chef might sell for 1.5x. Same profit, very different price.

What moves your multiple up

• Revenue that recurs: contracts, subscriptions, maintenance plans, repeat customers.
• A business that runs without you. A manager, documented processes, a team that stays.
• Three years of clean, consistent, growing financials that match your tax returns.
• No single customer over 10 to 15 percent of revenue.
• A transferable lease, licenses, and supplier relationships.

What moves it down

• Declining revenue or profit.
• Books that don't match the tax returns, or lots of cash income you can't document.
• The owner is the business. Buyers fear customers leave when you do.
• Deferred maintenance, expired licenses, or a lease with less than three years left.

The estimator on this page is a starting point. A real valuation looks at all of the above and at what comparable businesses in Utah actually sold for. We do that for free, and we'll tell you if the number isn't what you hoped and what would change it.