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E-commerce Business Valuation Calculator
Estimate your business value using earnings multiples, revenue multiples, and comparable benchmarks. Understand what your company could be worth.
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How you compare
Your calculated rate against market benchmarks.
Average P/E. Typical for established small businesses.
Insights
Personalized analysis based on your inputs.
Info
Revenue and profit valuations diverge significantly
Your revenue-based valuation ($1,500,000) and profit-based valuation ($500,000) differ by 100%. This suggests the chosen multiples may not align well with the business profile.
→ Research comparable transactions in your industry to find multiples that match your business stage and growth rate.
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Frequently Asked Questions
What are the most common business valuation methods?
The three most common methods are earnings multiples (applying a multiplier to annual profit or EBITDA), revenue multiples (common for high-growth SaaS), and discounted cash flow (projecting future cash flows and discounting to present value). Most buyers and investors use a combination of these approaches.
What is a typical valuation multiple for a small business?
Small businesses typically sell for 2-4x annual earnings (SDE or EBITDA). SaaS businesses command higher multiples of 4-10x ARR depending on growth rate and retention. Service businesses tend toward 1-3x earnings. Industry, growth trajectory, and customer concentration significantly impact the multiple.
How does revenue vs profit affect business valuation?
Profitable businesses are usually valued on earnings multiples, while high-growth companies may be valued on revenue multiples. A business earning $500K profit at a 4x multiple is worth $2M. Revenue-based valuations are common when profit is reinvested in growth, typical for venture-backed startups.
What factors increase or decrease business valuation?
Factors that increase value include recurring revenue, diverse customer base, strong growth rate, proprietary technology, and low owner dependence. Factors that decrease value include customer concentration, owner dependence, declining revenue, thin margins, and regulatory risk.
When should I get a professional business valuation?
Get a professional valuation when preparing to sell, raising investment, planning an exit, handling partnership disputes, or for estate and tax planning. Professional valuations cost $5,000-$30,000 depending on complexity but provide defensible numbers for negotiations and legal proceedings.