Business Valuation Readiness Calculator
Estimate your main-street business value and test whether buyer financing can support your asking price using seller discretionary earnings and acquisition debt capacity.
Quick answer: Estimate a main-street business value using seller discretionary earnings, multiple range, owner replacement salary, working-capital adjustment, debt capacity, seller note, and buyer cash-at-close assumptions. Enter revenue, net profit, add-backs, and buyer salary to personalize the estimate. It returns SDE, valuation range, and working-capital adjusted value so you can compare the impact before choosing a next step. Use it to compare payment, APR, total cost, credit impact, and lender or card tradeoffs.
This business models at $748,000 after working-capital adjustments, with a buyer DSCR of 1.74.
Prepare normalized financials, add-back documentation, working-capital schedule, and lender package.
Low case is $517,000; target is $658,000; high case is $799,000.
Seller note is $74,800; buyer down payment is $112,200; acquisition debt is $561,000.
Buyer cash flow before debt is $155,000; monthly debt payment is $7,414; value is 0.94x revenue.
Compare business loan rates
- 1
Normalize seller earnings
Separate defensible add-backs from expenses a buyer must keep paying.
- 2
Check buyer debt capacity
Use DSCR to test whether financing supports the target price.
- 3
Prepare sale materials
Document working capital, inventory, customer concentration, and recurring revenue before listing.
This is an educational estimate, not tax, legal, investment, or lending advice. Tax rules, rates, and eligibility change and depend on your full situation. Confirm with a qualified professional or the provider before acting.
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Reviewed Sep 23, 2026 · Methodology
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Everything you need to know.
What does an example Business Valuation Readiness Planner calculation look like?
Why does my target enterprise value differ from what a buyer can actually afford?
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Why This Matters
A business valuation based on seller discretionary earnings reflects what a new owner would actually earn, which determines how much a lender will finance and what buyers can realistically afford to pay. Without understanding this gap between your asking price and what financing can support, you may overprice the business or discover buyer financing falls short during due diligence. This calculator bridges that gap by modeling the full acquisition structure (debt capacity, seller financing, and down payment), so you can refine your price before marketing.
How to Use It
- 1Enter your annual revenue to establish the business's top-line scale.
- 2Input your net profit as reported on your tax return.
- 3Add back your owner salary or the amount you pay yourself.
- 4Add any other defensible add-backs (non-recurring expenses, owner benefits, or improvements).
- 5Estimate the salary a buyer-operator would need to pay themselves to run the business.
- 6Set your low SDE multiple based on market comparables or industry benchmarks.
- 7Set your target SDE multiple representing your hoped-for valuation.
- 8Set your high SDE multiple to see upside valuation scenarios.
- 9Specify whether working capital (receivables, payables, cash) is included in the sale price.
- 10Specify whether inventory is included in the sale price.
- 11Enter the percentage of the sale price you're willing to finance via seller note.
- 12Enter the buyer's planned down payment as a percentage of the purchase price.
- 13Input the interest rate the buyer expects to pay on acquisition financing.
- 14Enter the term in years for the buyer's acquisition loan.
- 15Review your calculated seller discretionary earnings, enterprise values across all three multiples, working-capital adjustment, seller note and down payment amounts, the buyer's acquisition debt needed, monthly and annual debt payments, debt service coverage ratio, maximum lenderable debt capacity, and any annual debt-service gap.
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