Business Valuation Calculator
How much is your business worth? Enter your monthly revenue, net margin, growth rate, and stability to get an estimated valuation (20x–40x monthly profit multiple).
Understanding Business Valuation
What is business valuation?
Business valuation is the process of determining the economic value of a company. For online businesses, SaaS, content sites, and digital products, the standard approach is to apply a multiple to your monthly or annual net profit. This reflects what a buyer or investor would pay to acquire your business based on its cash flow and growth potential.
The 20x–40x monthly profit multiple
The multiple represents how many months of profit your business is worth. A 30x multiple means your business is valued at 30 months (2.5 years) of net profit. For example, $5,000/month profit × 30x = $150,000 valuation. Higher multiples (35x–40x) go to fast-growing, stable businesses. Lower multiples (20x–25x) apply to riskier or more volatile businesses.
What increases your valuation?
- Growth — Strong annual growth (20%+) commands higher multiples.
- Recurring revenue — Subscriptions and retainers are valued more than one-time sales.
- Diversified clients — No single client should represent more than 20% of revenue.
- Low churn — Retaining customers shows product-market fit.
- Systems & scalability — Businesses that run without heavy owner involvement sell for more.
Frequently Asked Questions
Business valuation is the process of determining the economic value of a business. For online businesses and SaaS companies, the most common method is to apply a multiple to monthly or annual net profit. This multiple typically ranges from 20x to 40x monthly profit depending on growth, stability, and market conditions.
The 20x-40x multiple represents how many months of profit a buyer would pay for an online business. A 30x multiple means your business is valued at 30 months (2.5 years) of net profit. Higher multiples (35x-40x) apply to fast-growing, stable businesses with recurring revenue. Lower multiples (20x-25x) apply to businesses with higher risk or volatility.
Online businesses—especially SaaS, content sites, and e-commerce—often use monthly profit multiples because they have predictable recurring revenue. Unlike traditional businesses valued on EBITDA or revenue multiples, digital businesses are typically asset-light and valued on their net profit. Buyers and investors use this method for acquisitions and exits.
Factors that increase valuation include: strong annual growth (20%+), recurring revenue or subscriptions, diversified customer base (no single client over 20%), low churn, systems that run without owner involvement, and a scalable business model. Each of these reduces risk and commands a higher multiple.
Stability is measured by recurring revenue, customer concentration, churn rate, and business dependence on the owner. A score of 10/10 means highly recurring revenue, many diversified clients, low churn, and systems that run independently. A score of 1/10 indicates volatile one-time sales, few or concentrated clients, and heavy owner involvement.