Instructions for small business valuation – simple valuation
Below follows a brief step by step guide on how to estimate value of your small business with our online forms. This method gives an approximative estimation of the value of your business. To get a more accurate valuation, we recommend the advanced version. If you have comments or need help with the valuation, you can post a comment below or below the simple valuation form.
- First of all, do not use commas, use dots. For example 15.3 is how you write fifteen point three.
- Secondly, fill all available text fields, otherwise the calculation might not work the way it is intended.
- And remember, this is a valuation tool based on your inputs and our formulas. To get an exact valuation of your company, you might have to hire a business valuation consultant. This form gives you an indicative value of your company.
- LTM = Last Twelve monts
- FY = Fiscal Year
- Input the sales for the last twelve monts (LTM). If you cannot estimate the exact sales, use your last Year End Report numbers.
- Estimate sales for the coming 12 months. If you used LTM you should use the next coming 12 months. If you used the Year End Report, for example 2008, you should estimate for 2009.
- Estimate what growth your business will have annually the coming five years.
- Input your Earnings Before Interest and Taxes (EBIT) for the last twelve monts (LTM). If you cannot estimate the exact EBIT, use your last Year End Report numbers.
- Estimate EBITDA for the coming 12 months. If you used LTM you should use the next coming 12 months. If you used the Year End Report, for example 2008, you should estimate for 2009.
- Pick your industry, the industries are sorted according to a Industry Classification Benchmark and is standard. If you cannot find the exact industry, pick one as close as possible to yours.
- Estimate your business risk. If your business is small, your risk will increase and vice versa. If you are a real estate company you generally have lower business risk than if you were working in the oil industry.
Now press the estimate value button!
If you want to know how we calculate the value of your business, you can follow this link on determining a business value.