Business Valuation Calculator for B2B Companies (Indicative Range)
An indicative enterprise value range for a lower-middle-market B2B company, built from the multiples in our published guide and adjusted for five factors buyers weigh. It shows what moved the multiple and what reaches the seller at closing.
How to use it
- 1Choose your sector and enter revenue and adjusted EBITDA, or switch to SDE if you run a smaller owner-operated business.
- 2Describe growth, recurring revenue, customer concentration, owner dependence and gross margin. Each one moves the multiple by a stated amount.
- 3Read the low, mid and high enterprise value, see which factors moved the multiple, and walk the bridge from enterprise value to cash at close.
- 4Copy the link to share or revisit the same inputs. Nothing you enter leaves your browser.
Indicative enterprise value
$20.0M to $33.2M, midpoint $26.4M: 6.6x adjusted EBITDA of $4.0M.
- Low
- $20.0M
- 5.0x EBITDA
- Mid
- $26.4M
- 6.6x EBITDA
- High
- $33.2M
- 8.3x EBITDA
Implied multiple 6.6x EBITDA (range 5.0x–8.3x), about 1.06x revenue at the midpoint. Adjusted EBITDA margin 16.0%.
What moved the multiple
| Step | Your input | Effect |
|---|---|---|
| Size band | $3–5M adjusted EBITDA | 5.0x–7.5x |
| Sector | Business services | 5.0x–9.0x |
| Base range | Average of size and sector ranges | 5.00x–8.25x |
| Recurring revenue | 40%A meaningful but not majority recurring base; neutral in this tool. | 0.00x |
| Revenue growth | 8%Growth roughly in line with the economy; neutral in this tool. | 0.00x |
| Largest customer | 12%Moderate concentration; neutral in this tool. | 0.00x |
| Owner dependence | MediumThe owner is involved but not irreplaceable; neutral in this tool. | 0.00x |
| Gross margin | 35%Neutral in this tool. | 0.00x |
| Total adjustment | Applied to low, mid and high | 0.00x |
From enterprise value to cash at close
| Enterprise value6.6x × $4.0M adjusted EBITDA | $26.4M |
|---|---|
| Less: debt repaid at closingBank debt, lines, seller notes and finance leases | ($3.0M) |
| Plus: cash left in the businessCash-free, debt-free basis | $1.0M |
| Less: transaction costsAdvisory, legal, accounting and quality-of-earnings fees | ($990K) |
| Equity value to sellerPre-tax, before any working capital adjustment | $23.4M |
| Less: escrow and holdbacksDeferred, not lost, if no claims arise | ($528K) |
| Pre-tax cash at close87% of enterprise value | $22.9M |
Excludes the working capital adjustment, debt-like items, earnouts, seller notes, rollover equity and income taxes, any of which can reduce what reaches the owner. Not tax advice.
Want a view grounded in your numbers?
A real valuation starts with a quality-of-earnings view of adjusted EBITDA and evidence of what buyers are paying now. We discuss valuation with owners confidentially and without obligation.
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How the calculator works
- Earnings. The tool works on adjusted EBITDA. In SDE mode it first deducts your estimate of market pay for a hired manager in the owner’s role, which converts SDE into adjusted EBITDA.
- Size band. Adjusted EBITDA places the business in one of the four size bands published in our valuation multiples guide. Below $1M the $1–3M band is used and the result is flagged as a ceiling; above $25M the $10–25M band is used.
- Sector. The sector range comes from the same guide, which states its sector ranges for businesses with $3M to $10M of EBITDA.
- Base range. Because the guide says smaller businesses sit toward the bottom of each sector range and larger ones toward the top, the tool averages the size-band range and the sector range end by end. The midpoint of that base range is the starting multiple.
- Quality factors. Five factors each add or subtract part of a turn, following the rule of thumb below. The total is capped at ±2.0x and is added to the low, mid and high multiples alike. Multiples are rounded to one decimal.
- Enterprise value. Each multiple is applied to adjusted EBITDA, giving the low, mid and high indicative enterprise value.
- Bridge. From the point you choose, the tool subtracts debt repaid at closing, adds cash left in the business, and subtracts transaction costs and escrow as percentages of enterprise value.
| Adjusted EBITDA | Indicative EV/EBITDA |
|---|---|
| $1–3M | 4.0x–6.5x |
| $3–5M | 5.0x–7.5x |
| $5–10M | 6.0x–9.0x |
| $10–25M | 7.5x–11.0x+ |
Copied from the size-band table in our guide to valuation multiples in the lower middle market. Indicative ranges only, not a valuation or an offer.
| Sector | Indicative EV/EBITDA |
|---|---|
| Industrial & manufacturing | 5.0x–8.0x |
| Distribution & logistics | 5.0x–8.5x |
| Software & SaaS | 8.0x–14.0x+ (or ARR-based) |
| Tech-enabled services | 7.0x–11.0x |
| Healthcare services | 6.0x–10.0x |
| Business services | 5.0x–9.0x |
| Building products | 5.5x–9.0x |
| Environmental services | 6.0x–10.0x |
Copied from the sector table in the same guide, which assumes $3M to $10M of EBITDA. Open-ended ranges (“11.0x+”, “14.0x+”) are used at their stated number.
The tool’s rule of thumb for quality factors
Our guide describes factors that commonly add or subtract about a turn of EBITDA. To make that usable, the calculator assigns each factor a fixed adjustment by bracket. These step sizes are this tool’s own simplification, chosen so that no single factor moves the multiple by more than one turn; they are not drawn from a transaction database.
| Factor | Brackets and adjustment |
|---|---|
| Recurring revenue | 75% or more: +0.75x; 50–74%: +0.50x; 25–49%: 0; Under 25%: −0.50x |
| Revenue growth | 20% or more: +0.75x; 10–19%: +0.50x; 3–9%: 0; 0–2%: −0.25x; Declining: −0.75x |
| Largest customer | Under 10%: +0.25x; 10–19%: 0; 20–34%: −0.50x; 35% or more: −1.00x |
| Owner dependence | Low: +0.50x; Medium: 0; High: −1.00x |
| Gross margin | 50% or more: +0.25x; 30–49%: 0; 20–29%: −0.25x; Under 20%: −0.50x |
Total adjustment capped at ±2.0x. Gross margin brackets are the same for every sector; a distributor with a 20% gross margin may be normal for its sector, and the sector range already reflects that.
The full tables, including value drivers by sector and ARR multiples for software, are in our guide to valuation multiples in the lower middle market.
What buyers pay for
A buyer is asking two questions: how confident am I that these earnings will continue, and how fast will they grow? Everything in the calculator maps to one of them. Size matters because more buyers can compete for a larger business and lenders will finance more of the price. Recurring revenue, low customer concentration and a team that does not depend on the founder raise confidence. Growth and healthy margins raise the earnings a buyer expects to own.
Several things the calculator cannot see also move price: the quality of financial reporting, capital expenditure needs, supplier and labor risk, the strength of the market at the time of sale, and above all how many qualified buyers compete. A well-run process with strategic and financial buyers at the table is what moves an outcome toward the top of a range.
SDE or adjusted EBITDA?
Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, normalized for one-time items and with the owner paid a market salary. It is the standard measure in the lower middle market because the buyer, usually a company or a private equity fund, will hire management rather than run the business itself.
Seller’s discretionary earnings (SDE) also adds back the full pay and benefits of one owner-operator. It is used for smaller businesses, typically under about $1M of earnings, where the buyer is often an individual who will step into the owner’s role. Because SDE is a larger number for the same business, an SDE multiple is lower than an EBITDA multiple and the two should not be compared directly. This calculator does not apply a separate SDE multiple: it subtracts your estimate of a market salary for the owner’s role and then values the resulting adjusted EBITDA, so both modes rest on the same published ranges.
Frequently asked questions
Is this a valuation of my business?
No. It is an indicative range from published rules of thumb, built for orientation. A valuation requires a review of your financial statements and adjustments, an assessment of the business and current evidence from buyers and lenders. It is not an appraisal, a fairness opinion or an offer.
Where do the multiple ranges come from?
They are copied from the size-band and sector tables in Laurent Capital’s guide to valuation multiples in the lower middle market. Those ranges reflect general experience of private US transactions, not a database of deals, and they move with interest rates, credit availability and buyer appetite.
Why does the calculator average the size and sector ranges?
Both matter and neither tells the whole story. The guide’s sector ranges assume $3M to $10M of EBITDA and note that smaller businesses sit toward the bottom and larger ones toward the top. Averaging the two ranges end by end is a simple, transparent way to combine them.
Should I use SDE or adjusted EBITDA?
Use adjusted EBITDA if the business has a management team and pays the owner roughly a market salary, or if earnings are above about $1M. Use SDE if you run a smaller business day to day and your pay is part of the earnings; the calculator then deducts what it would cost to hire someone to do your job.
Why is cash at close lower than enterprise value?
Most private companies are sold cash-free and debt-free, so debt is repaid from the proceeds and cash is credited back. Transaction costs are paid at closing and part of the price is often held in escrow for 12 to 18 months. Working capital adjustments and taxes, which this tool does not model, reduce proceeds further.
How can I move my business toward the top of the range?
Over 12 to 36 months, the levers owners control best are management depth and customer concentration, followed by the share of revenue under contract and the quality of financial reporting. A competitive sale process then determines where in the range an offer lands.
Methodology and sources
Laurent Capital Research built this calculator from the firm’s published guide to valuation multiples in the lower middle market. The size-band and sector ranges are copied verbatim from that guide, and an automated test checks that they still match it. Those ranges describe general experience of private US transactions; they are not derived from a proprietary database, a survey or a sample of deals.
The base range is the end-by-end average of the size-band and sector ranges. The five factor adjustments and the ±2.0x cap are this tool’s own rule of thumb, set to stay within the guide’s statement that each factor commonly adds or subtracts about a turn. The bridge uses defaults taken from the guide’s worked example (transaction costs of $1.5M and escrows of $0.8M on a $40M enterprise value, or 3.75% and 2%), which you can change.
All arithmetic runs in your browser; inputs are stored only in the page address so a result can be shared. The tool does not model working capital, debt-like items, earnouts, seller notes, rollover equity, deal structure or taxes. Not investment, tax or legal advice.
- 1Laurent Capital, Valuation Multiples in the Lower Middle Market: A Sector-by-Sector Guide (updated October 26, 2026). Size-band, sector and factor tables; worked example of the bridge to cash at close
- 2Laurent Capital, Valuation advisory. How the firm approaches a full valuation
Data last updated October 26, 2026.
Cite this tool
You may quote and republish figures from this page with attribution and a link to the source.
Citation
Laurent Capital Research, “Business Valuation Calculator for B2B Companies (Indicative Range),” 2026, https://laurent.capital/tools/business-valuation-calculatorLink (HTML)
<a href="https://laurent.capital/tools/business-valuation-calculator">Business Valuation Calculator for B2B Companies (Indicative Range)</a> (Laurent Capital)For a view grounded in your own numbers, see our valuation advisory service or request a confidential valuation discussion.
Want to know what your business would be worth to buyers today?
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