Know what your business is worth before you need to sell it. Enter revenue, owner earnings, recurring contracts, and equipment—get a ballpark valuation using metrics real buyers use.
Buyers don't pay for revenue—they pay for Seller's Discretionary Earnings (SDE): your net profit plus owner compensation plus any owner-specific perks. A $500k revenue business with $60k SDE is worth less than a $300k revenue business with $90k SDE. Typical SDE multiples for trade businesses: 1.5–3.5×, depending on size, growth, and systems. Add equipment and inventory on top.
A service agreement or maintenance contract that renews annually is worth far more than a one-time job of the same dollar amount. Buyers will pay a premium multiple for predictable recurring revenue because it reduces their risk. $30k in annual maintenance agreements can add $60k–$120k to your sale price. Build recurring revenue now, even if you're not selling for 5 years.
The hardest thing to sell is a business where all the knowledge, relationships, and skills live in the owner's head. Buyers discount heavily for key-person risk. Every process you document, every customer relationship your employees own, and every system that runs without you adds directly to the multiple. A business that runs 80% without you is worth 40–60% more than one that stops when you take a vacation.
The Tradesman's Business Starter Kit includes financial tracking forms, service agreement templates, and business planning tools that make your business sellable—even if you never plan to sell. Guide from $19 — Complete Kit with all 19 templates, $49.
Get the Business Kit — $19Thinking about selling, bringing on a partner, or just curious what your business is worth? This estimator uses the same metrics buyers actually apply — annual revenue, owner earnings, recurring service contracts, and asset value — to give you a realistic valuation range. It won't replace a formal appraisal, but it gives you a solid benchmark before any conversation about money changes hands.