Business Acquisition Deal Calculator
This calculator is designed to give a quick estimate for a business acquision. It is not a substitute for a professional business valuation. Values should be adjusted to reflect the actual business and should be filled in top-down. If real estate is involved in the deal, you can add that amount to the valuation after specifying the SDE, but for the purposes of this calculator, it is assumed the real estate transactions will be handled separately.
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Seller's Discretionary Earnings (SDE) = Profit + Owner Salary + Owner Benefit
0.5xSelected: 1.0x5.0x
Small/Medium sized businesses typcially sell for a 2x-3x multiple depending on their profit margin, how they are operated, the industry, and other supporting factors. Businesses under $200k SDE will typically sell for less than a 2x multiple if the owner is also the operator or key employee.
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$0$5,000,000
0%Selected: 10%20%
Down Payment Amount: $0
Seller Financing Amount: $0
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This is the salary of the person who will need to be hired to operate the business if the current owner is the operator or key employee.
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This is the money set aside to grow the business: hardware | tools | equipment | advertising | etc.
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Adjusted Cashflow = (SDE - Operator - Growth)
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The amount of money the business investor can expect to make annually from the business.
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Estimated annual taxes associated with operating income. (Adj Cashflow * .3)
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Annual Remaining Cashflow available to put towards debt service:
(Adjusted Cashflow - Profit - Taxes) = $0
(Adjusted Cashflow - Profit - Taxes) = $0
6Cannot calculate - insufficient monthly cash flow120
$0 / $0 = Payback Period = Infinity years
Estimated Montly Payment Amount: $0
Annual Repayment Amount: $0
* For the purposes of this calculator, all remaining cashflow is put towards loan repayment. In a real world example, the buyer and seller would typically agree on a safe monthly loan payment which would affect the Payback Period. SDE can fluctuate for many reasons, so there should be a safe margin in place.
DISCLAIMER: This calculator is provided for estimation purposes only and does not guarantee or represent an actual business valuation. The calculations are based on simplified assumptions and should not be used as a substitute for professional business valuation services. Actual business values may vary significantly based on market conditions, industry factors, and other variables not accounted for in this calculator. This calculator does not factor in interest on bank loans if they are utilized as an alternative to, or in addition to, seller financing.