AutoRev AI
Home/Tools/Business Valuation Calculator
Free tool for trade business owners

Business Valuation Calculator Free and Instant

Net income, D&A, and your earnings multiplier in, an estimated business value out. No email, no signup.

Use the calculator

Updated August 2026

What this calculator does

The earnings-multiplier method is the starting point most buyers and brokers use to price a trade business: take net income plus depreciation and amortization, then multiply by a number that reflects growth, risk, and recurring revenue. This calculator runs that math the moment you enter your numbers and a multiplier.

Set by your broker or recent comparable sales, not a number this tool guesses for you.

Estimated business value

$1,800,000

What net income plus D&A is standing in for

Net income on a tax return isn’t the number a buyer prices against. It gets shaped by depreciation schedules, interest expense, and bookkeeping choices made for tax purposes, none of which describe how much cash the business throws off in a normal year. Adding back depreciation and amortization strips out one of the largest non-cash charges and moves the number closer to what a buyer cares about: how much cash the business generates before financing and tax decisions get layered on top.

That combined figure, net income plus D&A, is a rough stand-in for EBITDA (earnings before interest, taxes, depreciation, and amortization), the measure most buyers and brokers start from when they price a trade business. It skips the fuller add-back schedule a broker would eventually build, a personal vehicle payment run through the business, one-time legal fees, an owner salary priced above or below market, but it is the right first cut: a cleaner read on cash-generating power than net income alone.

Why this calculator won't hand you a multiplier

That’s deliberate, not a missing feature. A trade business earning $400,000 a year through three long-term commercial maintenance contracts and a general manager running daily operations is a different asset than one earning that same $400,000 that lives entirely in the owner’s head and stalls the day the owner takes a month off. Buyers don’t pay the same multiple of the same cash flow for both of those businesses, and no calculator sitting on a marketing site can know which one is yours.

A real multiplier comes from a broker, a recent comparable sale in your trade and region, or a formal valuation engagement, something anchored to an actual transaction rather than a rule of thumb pulled from an article. Plug in the number your broker gives you, or run a few multipliers side by side above to see how much your business value moves on that one assumption alone.

What pushes a multiplier up or down

Five factors a broker weighs when they set the number, all separate from the net income and D&A math above.

Recurring revenue mix

Maintenance agreements and service contracts that renew on their own lower a buyer's risk, because revenue does not start back at zero every January. A business built mostly on one-time jobs and referral work reads as riskier than one with next year's revenue already on the books, even at an identical net income figure.

Staff depth beyond the owner

If sales, key accounts, and technical judgment calls all run through the owner personally, a buyer has to price in the risk of losing that the day the owner leaves. A manager or lead tech who can run the business without the owner on-site every day is one of the biggest single levers on a multiplier.

Customer concentration risk

A handful of large accounts making up most of a business's revenue is a warning sign in a valuation conversation, since losing one contract could gut the business overnight. A broad base of smaller accounts supports a stronger multiplier than a few big ones, even when the total revenue line looks identical.

Fleet and equipment condition

A fleet nearing the end of its useful life is capital a buyer has to spend right after closing, on top of whatever they paid for the business itself. Well-maintained trucks and current field equipment reduce that near-term outlay and support a stronger number.

Growth trend

Three years of flat or declining revenue gets priced differently than a clear upward trend, even against the same trailing net income. A buyer is paying for cash flow they expect going forward, not only the year that just closed, so the direction of the trendline moves the multiplier as much as the number itself.

A worked example: same cash flow, two different prices

Take a residential and light-commercial plumbing business with $310,000 in net income and $42,000 in depreciation and amortization on trucks, tools, and shop equipment. Net income plus D&A comes to $352,000, the starting cash-flow figure a buyer would price against.

Now run that $352,000 through two different multipliers, chosen only to show how much that one variable moves the outcome. They are not a suggested range for any real business:

2.5x multiplier

$880,000

$352,000 x 2.5

4.5x multiplier

$1,584,000

$352,000 x 4.5

The cash flow number didn’t change between those two lines; the multiplier did. A broker might land near the lower end for a business with thin recurring revenue and no manager beyond the owner, and near the higher end for the same cash flow inside a business with maintenance contracts, a diversified customer base, and a team that keeps running without the owner in the building. That $704,000 gap comes from the multiplier alone, the number this calculator leaves for you to set.

A business worth more is one that runs without you on every call

Owner dependency is one of the biggest things that pulls a multiplier down, and it usually starts with the phone. A business where every call, quote, and follow-up depends on the owner personally is worth less than one where that work keeps moving on its own. Take two shops with the same $350,000 in net income and D&A: in one, quotes go out only when the owner has a free hour between jobs, and growth stalls whenever the owner is out sick or on vacation. In the other, the phone gets answered, the quote goes out, and the follow-up happens whether the owner is on a roof, at dinner, or asleep.

That’s the shift AutoRev makes. It’s a general-purpose AI coworker you direct, not one feature tacked onto your phone line. You hand it a task, calls, estimates, follow-up texts, scheduling, whatever the day actually needs, and it carries it out the way a capable new hire would once you’ve shown them the ropes. It plugs into whatever FSM or CRM you already run, so pricing rules, job history, and customer records stay where they already live instead of splitting off into a separate system nobody opens.

AI Estimates

Priced from your own book, sent while they're still deciding.

Analytics

Every outcome, tied to revenue.

Outbound

Follows up on quotes that go quiet.

Automations

Connects all of it, no-code.

Inbound

AI answers every call, 24/7.

Tired of missing calls?

Get a free AI audit. We'll map your workflows and show you exactly where AutoRev's AI coworker fits in.

Book a Demo
FAQ

Valuation questions

What comes up before selling or benchmarking a trade business.

Business value = (net income + depreciation and amortization) x earnings multiplier. Net income plus D&A is a rough stand-in for EBITDA, the cash-flow measure most buyers and brokers price against, and the multiplier is a separate judgment call about growth, risk, and how much of the business's revenue renews on its own.

Seller's discretionary earnings (SDE) and EBITDA are close cousins. SDE usually adds back the owner's full compensation and a wider set of personal expenses run through the business, since a smaller owner-operated trade business is typically priced against what a single owner-operator could pay themselves. EBITDA is more common on larger businesses that already carry a management team, where owner pay is a normal operating cost rather than something to strip out. Ask a broker which measure fits your business's size before you lean on net income and D&A alone.

This tool does not supply one, on purpose. Multiples vary by trade, growth rate, recurring revenue mix, and current market conditions, a real number your broker or a comparable recent sale in your trade can give you, not something a calculator should guess.

The biggest levers are how much revenue renews without a new sales conversation, how dependent the business is on the owner personally, how concentrated the customer base is, the condition of the fleet and equipment, and whether revenue is trending up or down. All five get priced into the multiplier you choose, separately from the net income and D&A math above.

Those factors do not reduce to a formula. A broker weighing a heavily owner-dependent business against a comparable one with a manager already in place will land on two different multipliers for the identical net income and D&A figure, and that judgment belongs with a broker or valuation professional, not a script running in a browser.

The earnings-multiplier method loses most of its meaning close to zero. A business with thin or negative net income is often priced instead against the value of its hard assets, trucks, tools, equipment, and any owned property, since a buyer in that case is paying for what they can put to work rather than for cash flow that isn't there yet. That is a different valuation exercise from the one this calculator runs.

The figure here is a starting estimate of what the business is worth, not a cash amount that lands in your account at closing. A real deal might pay part of the price up front and the rest through an earnout tied to performance after the sale, or hold back a share pending the owner staying on through a transition period. Those terms get negotiated separately from the valuation math and can change what you collect against the headline number.

No. It is the same formula real buyers start from, but an actual sale price also weighs customer concentration, brand, management depth, and deal terms. Use this for a starting estimate, then bring in a business valuation professional before you set an asking price.

Yes. The earnings-multiplier formula applies across home service trades, including plumbing, electrical, roofing, and landscaping, not only HVAC. What a broker treats as typical for the multiplier shifts by trade, so run your own numbers here regardless of which trade you're in.

Yes, no signup, no account, the result shows the moment you enter valid numbers.

Grow the number before you sell it.

AutoRev answers every call and follows up on every lead, on top of the software you already run.

See AutoRev for your tradeHear it live
Ask MeganMMegan