Service Business
Valuation Calculator
Get a rough estimate of what your service business might be worth using the SDE multiple method. For planning purposes only.
Run your numbers
Business Financials
Revenue minus all expenses except owner compensation
Vehicle, phone, insurance, etc.
Maintenance contracts, service agreements, recurring customers
Estimated Business Value
Disclaimer: This is a rough estimate for planning purposes only. Actual business valuations depend on many additional factors. Consult a business broker or M&A advisor for a proper valuation.
What Drives Business Value
Recurring Revenue
Maintenance contracts and service agreements create predictable income. Businesses with 30%+ recurring revenue command higher multiples because buyers see more stable future income.
Owner Independence
A business that runs without the owner is worth more than one that depends on them. Trained employees, documented processes, and management systems increase value significantly.
Customer Diversification
If one customer represents more than 10-15% of revenue, that's a risk factor. A broad customer base with no single-customer dependency is more valuable and less risky for buyers.
Brand & Reputation
Strong online reviews, brand recognition, and market position add value. A business with hundreds of 5-star reviews and a recognizable name is worth more than an identical business without them.
Frequently Asked Questions
How are service businesses valued?
Service businesses are typically valued using a multiple of SDE (Seller's Discretionary Earnings). The multiple depends on factors like revenue size, recurring revenue, years in business, employee count, and market conditions. Most small service businesses sell for 1.5-3.5x SDE.
What is SDE (Seller's Discretionary Earnings)?
SDE is the total financial benefit the business provides to a single owner-operator. It includes net profit, owner's salary, owner benefits and perks, and any one-time or non-recurring expenses.
What increases the value of a service business?
Key value drivers include: recurring revenue, business systems that don't depend on the owner, trained employees, strong brand and online reviews, diversified customer base, documented processes, and consistent growth.
Build a More Valuable Business
Business Genie helps you systemize your operations, build recurring revenue, and track the metrics that increase business value.
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