Dealdoor

How much is my business worth? Free UK business valuation calculator

Most UK small and medium businesses are valued as a multiple of their maintainable profit. This page explains how that works, what moves the multiple, and gives you a free calculator for an indicative range in about 60 seconds, with no sign-up.

How UK businesses are valued

The most common method for owner-managed businesses is an earnings multiple: maintainable annual profit multiplied by a figure that reflects risk and growth. Profit is measured as seller's discretionary earnings (SDE) for owner-operated businesses, or EBITDA for businesses run by a management team.

Other methods are used alongside it. An asset-based approach values what the business owns less what it owes and suits asset-heavy or loss-making businesses. A discounted cash flow looks at forecast cash and is more common for larger deals. Buyers often cross-check more than one.

Adjust your profit before applying a multiple

A buyer prices what the business will earn for them, not what the accounts happen to show. Start from a recent full year and normalise it.

  • Add back one-off costs such as a legal dispute, a redundancy or a relocation.
  • Add back personal or discretionary expenses the new owner would not need to pay.
  • Replace the owner's pay with a market salary for the work they do. If the owner takes less than the role would cost, profit is overstated.
  • Adjust for rent, if you own the premises or pay a non-market rent.
  • Explain every adjustment with evidence. Unsupported add-backs are the first thing a buyer removes.

What moves the multiple up or down

The same profit can be worth very different amounts depending on how safe and transferable it is.

  • Owner dependency: a business that runs without you is worth more than one that stops when you do.
  • Customer concentration: relying on one or two customers lowers the multiple.
  • Recurring revenue: contracts and repeat income are valued above one-off sales.
  • Trading history: three or more years of consistent accounts reassure buyers.
  • Growth: a clear, evidenced trend upwards supports a higher multiple.
  • Size: larger and more profitable businesses usually attract higher multiples.
  • Lease and premises: a short lease or an unfavourable rent can reduce value.
  • Systems and people: documented processes and a trained team make a business easier to hand over.

A worked example

As an illustration only, take a business with £150,000 of adjusted annual earnings and an assumed multiple of 3.5×. That gives an enterprise value of £525,000. The multiple here is an assumption, not a market quote.

A headline value is not necessarily the cash you receive. Debt, surplus cash, working capital, stock and property are agreed separately, and part of the price may be deferred or tied to performance.

From valuation to asking price

A valuation is a range, not a price. Your asking price is a negotiating position: set it using the range, how quickly you want to sell, and how well you can evidence your figures. Having recent accounts, a clear reason for sale and your adjustments documented before you list shortens the process.

When you are ready, you can list your business on Dealdoor for free with no commission on completion, or ask for broker support.

Frequently asked questions

How much is my business worth?

There is no single figure for all UK businesses. A common approach estimates enterprise value from maintainable earnings and an appropriate multiple, but the earnings measure and multiple depend on the business, evidence and deal structure. Enter your figures above for an indicative range using Dealdoor's configured sector assumptions.

How many times profit is a business worth in the UK?

Dealdoor does not publish a verified database of completed UK SME sale multiples. The ranges on this site are model assumptions for an initial estimate. A real offer depends on the quality and definition of earnings, size, sector, buyer fit, assets, liabilities and transaction terms.

What's the difference between SDE and EBITDA?

Seller's Discretionary Earnings (SDE) starts with earnings available to one owner-operator and may add back that owner's compensation and eligible discretionary costs. EBITDA means earnings before interest, tax, depreciation and amortisation, and is often used for manager-run companies. The right measure depends on who does the work and what it costs to replace them.

Turnover or profit: which is used to value a business?

Profit, almost always. Turnover shows scale, but buyers pay for sustainable earnings and cash flow. A business with high turnover and thin margins is usually worth less than a smaller, more profitable one. Most valuations apply a multiple to adjusted profit (SDE or EBITDA), not to turnover.

Do I pay tax when I sell my business in the UK?

Tax treatment depends on the seller, business structure and transaction. Check current Capital Gains Tax rules and eligibility for Business Asset Disposal Relief on GOV.UK, or speak with a tax adviser before agreeing a sale.

How does the Dealdoor valuation calculator work?

It combines your adjusted earnings with benchmarks for your sector, matched to one of 25 sector profiles and 6 size bands, then adjusts for the factors buyers assess: owner dependency, recurring revenue, trading history and risk. The model gives an indicative range using configured assumptions; it is not a database of completed sale prices.

How accurate is this free valuation?

It provides an initial estimate using your inputs and model assumptions, not a formal valuation or guaranteed sale price. A detailed valuation for a sale also weighs contracts, customer concentration and growth. Use it to know your ballpark before you take the next step.

Do I need to create an account?

No. The Dealdoor valuation is free, confidential and needs no sign-up. Enter your figures and see your indicative range in about 60 seconds. Your data isn't shared.

Can I use this before listing my business for sale?

Yes, that's exactly what it's for. Get your indicative range first, see how the value drivers affect it, then, when you're ready, list on Dealdoor's marketplace for established, profitable UK businesses between £250k and £2m.

Valuation multiples by sector