What information do I need before I start?Before using the calculator, gather the following
What information do I need before I start?
The good news is you don’t need to be an accountant or have perfect records to get a meaningful valuation. The calculator is designed for business owners — not financial professionals. Reasonable estimates will get you a solid valuation range to work with. That said, the more accurate your numbers, the more reliable your result.
Here is what to have ready before you begin:
Your Annual Revenue (Last 12 Months)
This is the total amount of money your business brought in before any expenses are deducted. Use your most recent 12 months of sales — not a monthly average multiplied out, but your actual trailing twelve months if possible. If your business is seasonal or had an unusual year, you may want to note that, as it can affect how a buyer or broker interprets your numbers. You can find this figure on your profit and loss statement, your accounting software dashboard, or your most recent tax return Schedule C or business return.
Your Net Profit or Owner’s Earnings
This is where many business owners get confused — and it matters a lot for your valuation. You will want one of the following:
- Net profit — what is left after all business expenses are paid
- Owner’s salary or draw — what you pay yourself from the business
- Owner’s discretionary earnings — your net profit plus your salary, plus any personal expenses you run through the business
If you are not sure which to use, enter your best estimate of what you personally earn from the business in a given year — including your salary. The calculator will help apply the right methodology based on what you provide.
Your Industry Type
The calculator uses a database of 50 industry multipliers to determine how buyers value businesses like yours. Different industries command different multiples based on risk, growth potential, and buyer demand. You will select your industry from a dropdown during the wizard — pick the category that most closely matches your primary business activity. If your business spans multiple industries, choose the one that represents the majority of your revenue.
Approximate Years in Business
How long your business has been operating signals stability and track record to buyers. A business with 10 years of operating history is generally considered lower risk than one that is 2 years old, which can affect your multiplier. You do not need the exact founding date — a general range is fine.
Major Business Assets
Assets can add significant value on top of your earnings-based valuation. Think about what a buyer would be acquiring along with the business:
- Equipment, machinery, or vehicles
- Real estate owned by the business
- Inventory on hand
- Intellectual property, patents, or trademarks
- Proprietary software or systems
- An established customer list or contracts
You do not need formal appraisals for these — a reasonable estimated value is sufficient for the calculator. If your business is asset-heavy, this number can meaningfully increase your total valuation.
Other Helpful Information (Optional)
While not required, having the following handy can help you get a more complete picture:
- Year-over-year revenue trend — is your business growing, flat, or declining?
- Number of employees — headcount gives context to the size and complexity of operations
- Owner involvement — how many hours per week do you work in the business? A business that runs without the owner is worth more than one that depends entirely on you
- Existing debt or liabilities — outstanding loans or obligations tied to the business may factor into a buyer’s offer
Ready to get started? Head over to the Business Valuation Calculator — it takes less than 5 minutes and your results are instant.