Business Valuation Estimator

⚠️ Advisory use only. This tool provides estimates for planning conversations — not a formal appraisal. For M&A, exit, or legal purposes, engage a certified business appraiser (CVA/ABV). Results are directional estimates based on industry multiples and inputs provided.

Why This Matters

Most small business owners have no idea what their business is worth — until it's too late to do anything about it.

Business valuation used to be something that happened once — right before a sale, divorce, or estate event. By then, it was too late to do anything about the number. The owners who get the best outcomes are the ones who've been managing toward a valuation for years: reducing key person dependency, building team stability, improving margins, diversifying revenue.

ADP bundles BizEquity — a professional valuation tool — as a perk for its accountant partners. It only works for ADP clients. The accountant serving a client on Gusto, Paycom, or QBO gets nothing.

💡 Your moment: Running a valuation estimate in a client meeting — even an informal one — is one of the fastest ways to elevate the relationship from compliance to strategic. When a client sees their business is worth $1.8M, the conversation becomes: "What would it take to get to $2.5M?" That's the conversation that makes you their most important advisor.

Step 2 — Financials

Annual Revenue ($)

Seller's Discretionary Earnings / EBITDA ($)

Net income + owner salary + depreciation + one-time expenses. Most common SMB valuation basis.

Net Business Assets ($)

Equipment, inventory, IP, goodwill minus liabilities

Revenue Growth Rate (% last 3 yrs avg)

Step 3 — Workforce Health (affects valuation premium/discount)

Total Employees

Annual Turnover Rate (%)

Industry avg turnover affects buyer perception of business risk

Key Person Dependency

Key person risk significantly impacts buyer multiples

Average Employee Tenure (years)

Longer tenure = lower risk perception for buyers

Estimated Valuation Range

Conservative

—

Mid-Point

—

Optimistic

—

SDE / EBITDA Multiple

—

Primary SMB method

Revenue Multiple

—

Secondary check

Asset-Based

—

Floor / downside

Workforce Adj.

—

Premium or discount

What Drives Value — Advisory Talking Points

Value Enhancement Opportunities

Valuation multiples: BizBuySell Insight Report 2023, IBBA Market Pulse Q4 2023, Pepperdine Private Capital Markets Report. Workforce impact on valuation: Harvard Business Review, "The Human Capital Factor in Business Valuation" (2022). Key person risk discount methodology: American Society of Appraisers guidance.

Most small business owners have no idea what their business is worth — until it's too late to do anything about it.

Step 1 — Business Basics

Step 2 — Financials

Step 3 — Workforce Health (affects valuation premium/discount)

What Drives Value — Advisory Talking Points

Value Enhancement Opportunities