Business Valuation Calculator

Take the first step with bizval express, a quick, independent, and straightforward approach to obtain an indicative valuation range.

bizval express

Take your first step with bizval express: a fast, independent and simple way to get an indicative range.

What is my business worth? Fundamentally, like other investments, a business's value is a function of risk and reward. It is tied to its potential to generate future cash profits and the degree of certainty and growth of those profits. As a business owner, there are various reasons as to why you might need to know your valuation. It may be simple curiosity about it’s worth; There may be a specific need like planning for a sale, tax planning, insurance, or shareholder discussions; or planning for the future and needing to understand the long term impact of your decisions. Our calculator has been specifically developed to guide you through this process in a pragmatic, yet accurate and technically sound way.

bizval Business Valuation Tool

We didn’t invent the online valuation tool. We just made it better. We made it simpler in the front-end and more detailed in the back-end where the calculation engine works its magic. This gives you the best possible estimate of the valuation of your business without making the inputs too complicated.

Our business valuation calculator helps assess a business’s worth through metrics, market conditions, and other factors. It use 3 key methods namely discounted cash flow, profit multiples (Based on comparable company analysis and market multiples), and asset-based valuations, to arrive at a comprehensive and accurate answer.

Using our proprietary platform, users enter around 25 pieces of key information about their business including data such as revenue, costs, assets, growth forecasts, and various other metrics into the calculator to get an estimated value range. In addition, we offer a complimentary online consutation with a valuation expert to ensure that the inputs and outputs are clearly understood by the user and to deliver a comprehensive evaluation.

Reasons Why You Need to Calculate the Value of Your Business

There are several situations where having a business valuation is necessary:

Selling or Merging. Knowing your business’s value helps you set a fair expectation around selling price which allows you to negotiate effectively with potential buyers and investors.
Investment Opportunities. If you are considering acquiring a stake in another business, it is crucial to accurately assess the value of the target company to ensure that you do not overpay.
Business Strategy. Business valuation helps in making better long term strategic planning decisions. By understanding the value drivers and running scenarios you can make informed decisions for future success.
Succession Planning. Accurate and objective business valuation ensures that you can plan for future succession. Be it to determine a fair price to sell to successors, share incentive schemes or passing on the business to a family member, a valuation can assist in the process and help avoid disputes.
Tax Planning. It’s crucial to accurately determine a business’s value to make informed financial decisions around optimizing tax planning and structuring (for example moving assets into a Trust or preparing for future capital gains tax events).
Insurance Coverage. Obtaining accurate insurance coverage requires knowledge of your business’s value. This ensures that you’re adequately covered against losses in the event of the death of a key person or shareholder in the business. Key-man and buy-sell insurance are two examples.
Performance Measurement. Assessing your business’s performance helps track growth, profitability, and efficiency. A valuation is a composite of these inputs and an increase or decrease in valuation of time is an indication of how the business is performing. Stay informed for better decision-making.
Exit Strategy. Business valuations are important when exiting or planning on exiting a business. Just because your business has value, it doesn’t mean it is sellable, so used in conjunction with an exit readiness assessment can help you put a plan in place.
Legal Disputes. Accurate company valuation is crucial for fair settlements in separation agreements. Be it shareholder separations or divorce settlements, and accurate and independent valuation is critical..
Employee Benefits. Employees may be incentivised with a share incentive scheme or ESOP. Regular and accurate valuations are essential to ensure transparency and legitimacy of such schemes.

bizval solutions help with

Growing a business

Preparing an exit

Planning for sale

Assessing an acquisition

Raising funding

Navigating disputes

Generating more leads

Ways That Our Business Valuation Calculator Determines the Value of Your Business

What is the Best Valuation Multiple for a Small Business?

Calculating a business’s value depends on its type and the reason for the valuation. We make use of three common methods:

Income-Based Approach (Discounted Cash Flow)

The income-based approach is commonly used to value operating companies. It assesses the current business value by projecting future cash flows. This means estimating the expected net income over time and recalculating the present cash flow. This method provides intrinsic value and is often used when a company considers a merger or acquisition. This is a core component of our methodology.

Multiples based approach

The market multiples based approach is a common method to determine a business’s current value through comparison. It evaluates a company by comparing it to similar businesses in the same industry, known as “comps.” To find a company’s market value, one looks at recently sold comps, compares the valuation to their earnings (of profits) and then derives a multiple. This multiple is then applied one’s own profits to derive a valuation for your business. The market approach provides a relative value and, when combined with other methods, can offer a more accurate picture of a company’s value.. This method should be used as a sense check and in conjunction with other methods as no two companies are the same.

Asset-Based Approach

The asset-based or adjusted net asset method is a 3rd method we apply.This method considers a company’s present value as the difference between the fair market value of its net assets and its liabilities. It is particularly effective for valuing real estate, such as new construction or commercial properties, or asset heavy business. It is also often used to determine the liquidation value of a business.

Information You'll Need to Calculate Your Business Value

Here’s what information you will need in order to be able to calculate the value of a business:

The date the business was created
The industry and sector
Region of operations
Legal structure
Number of employees
Last 3 years financial statements (Income statement and balance sheet)
Details of working capital (Debtors, Creditors and Bank balances)
Future financial forecasts and expectations
Knowledge of business operations, customers, phase of growth, risks and degree of owner dependence

For more complex business additional specific information may be required.

Why Use Our Business Valuation Calculator?

Using our Valuation Calculator Tool in your business can offer important benefits. Here are some key advantages:

Accuracy and Reliability. Our Valuation calculator helps businesses achieve precise and reliable valuations. This supports better financial planning and decision-making, leading to increased profitability.
User-Friendly Interface. Our user-friendly interface helps you to easily navigate the valuation on your own. However, a complimentary online consultation is available should you require it.
Customisable Parameters. Each input is unique to your business. Furthermore, our scenario tool allows you to flex and customise inputs afterward to see the impact of changes on the valuation…
Instant Results. Our business valuation results are produced instantly. No more long waits to get an answer.
Comprehensive Insights. Our Business valuation experts are on hand to offer unique insights into your valuation. Every valuation is quality reviewed in the back-end to ensure the highest levels of relevance and accuracy.

FAQs

How is the SDE valuation calculated?

We do not make use of an SDE methodology. However, typically when an SDE method is used, one would combine your annual sales and owner’s salary to represent your business’s cash flow, then deduct the cost of sales. This figure is multiplied by a standard multiplier not specific to any industry, as cash flow is key in an SDE valuation. These are indicative SDE multiples in the USA:

SDE under $50,000 uses a multiplier of 1.2
SDE under $75,000 uses a multiplier of 1.8
SDE under $100,000 uses a multiplier of 2.0
SDE under $200,000 uses a multiplier of 2.4
SDE under $300,000 uses a multiplier of 3.0

Note: Riskier industries or less appealing ones may require a lower multiplier.

One would then add your non-operational assets, assuming the buyer views them as cash equivalent.

Finally, one would then adjust the valuation with certain factors, for example age of business, growth, etc.

How is the EBITDA valuation calculated?

We determine a simplified EBITDA valuation based on the fields you completed. This value is then multiplied by an industry-specific multiplier which is further adjusted based on your unique circumstances.

What is the formula for valuing my business?

We make use of a combination of Discounted Cash Flow, Earnings Multiple and Net Asset vaue methods to derive a valuation range.