How Much Can I Sell My Business For? [Download Calculator]

If you want to sell your business, there are several technical valuation methods to determine the right selling price. But before you hire a business valuator to do that for you, consider following these steps to maximize your selling price:

  1. First, estimate roughly how much you can sell your business for (below)
  2. Then, improve certain areas of your business to maximize the selling price
  3. Now employ the technical valuation methods to fine-tune the estimation of selling price

This strategy works for real estate, so why not for selling your business? For example, you may first get an estimate of how much houses on your block are sold for. Then you invest $80,000 to renovate your house or condo. That raises the value of your house by $150,000, so ultimately, the selling price goes up. Same method can be applied for selling your business.

Let’s explore each step.

1. Quick and dirty formula for selling price

The rough ballpark of your business’s selling price is to multiply your company’s EBITDA by 4. (EBITDA = earnings before interest, tax, depreciation & amortization)

For example, let’s say your business’s financials look something like this:

Revenue                      $3.5 million

Cost of Goods Sold    $1.0 million

Gross Profit                 $2.5 million

Operating Cost           $1.8 million

EBITDA                       $0.7 million

Multiply $0.7m by 4x. Therefore, a reasonable expectation of how much you can receive for your business is $2.8 million. Again, this is just a rough estimate of the selling price, but you need to know this as a starting point.

In reality, the number that you multiply to your EBITDA is typically somewhere between 2 and 6, which means that you can sell a small, private business that has been steady and stable for the past 5 years for somewhere between $1.4 million and $4.2 million.

That’s a big range, so how do you get the selling price closer to $4.2 million? Now that you know the starting point, let’s go through the factors that will get you to the highest selling price.

2. How to maximize the selling price

Maximizing the selling price depends on a multitude of factors, some with higher weighting than others. 

The most important base factors your business should possess before you decide to sell your business are:

  • Business has been established for more than 5 years
  • Revenue has been steady and growing at least 1% yoy the last 5 years
  • After-tax cash flow is/has been positive the last 5 years (i.e. profitable business)
  • EBITDA margin (EBITDA as a % of Revenue) is/has been steady at 20% or above the last 5 years

Other factors that affect the selling price are listed below. Scroll down to download the calculator.

how to sell your business | selling your business | selling price of your business


At this point in your business where you’re considering selling your business but you aren’t in a rush, the most prudent way is to find out what the rough selling price would be for your business and grow your business’s valuation by targeting improvement in certain areas of your business. 
The list can go on but the truth is, there’s no such thing as the perfect selling price. In my days working for a fund, we followed 8-factor investment criteria that the companies had to meet in order for us to consider investing in. Some people rely on a “gut” feeling and others will do a full-blown 100-page research & analysis report.

See other posts (at the time of writing this, they are not yet posted but are in the works) to grow your business to maximize the selling price.

Scroll down for the link to download the spreadsheet to find out how much you can sell your business for.

3. Valuation methods

Once you’ve successfully improved your company’s performance to maximize the selling price, the following are valuation methods (which will be posted if they are not at the time of reading this):

  • Discounted cash flow method
  • Comparable public company multiple
  • Precedent transaction multiple
  • Net book value

More on this later. First, download the calculator below for a rough estimate.

Download to calculate selling price of your business.

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