Business Free

Business Valuation Calculator

Estimate what a contracting business is worth using revenue multiples and EBITDA methods with GC-specific adjustments.

Financial Information

Annual Revenue ($)

Annual Net Profit ($)

Owner Salary ($)

Owner Benefits / Perks ($)

One-Time / Non-Recurring Expenses ($)

Depreciation ($)

Interest Expense ($)

Business Factors

Repeat Client Revenue

Owner Dependence

Equipment & Vehicle Condition

Licensed / Certified Staff

Financial Records

Revenue Growth (Last 3 Years)

Customer Concentration

Estimated Business Value

Low Mid High

-- -- --

SDE (Seller's Discretionary Earnings)

EBITDA

Net Profit Margin

Adjustment Factors

Total Adjustment --

Valuation Methods

Revenue Multiple Method --

EBITDA Multiple Method (3-5x) --

SDE Multiple Method --

📊

Email these results to yourself

Get a copy you can reference on the job site or attach to a quote.

Also send me free tools, updates, and tips for pros. Unsubscribe anytime.

How to Use This Calculator

1. Enter your financials. Input your annual revenue, net profit, owner salary, benefits, one-time expenses, depreciation, and interest. These numbers feed the SDE and EBITDA calculations that drive the valuation.

2. Set your business factors. Select the options that best describe your company. Repeat client revenue, owner dependence, equipment condition, staff licensing, financial records quality, growth rate, and customer concentration all affect the multiplier applied to your earnings.

3. Review the valuation range. The low, mid, and high estimates give you a realistic range. The mid-point is the most likely value in a fair market transaction. The adjustment factors show exactly what is helping or hurting your valuation.

How GC Business Valuation Works

Revenue multiples are the starting point. Small GCs (under $1M revenue) typically sell for 0.5-1.0x annual revenue. Mid-size firms ($1M-$5M) command 1.0-1.5x. Large operations above $5M can reach 1.5-2.5x. These multiples reflect the fact that larger, more established businesses carry less risk for buyers.

SDE is the buyer's number. Seller's Discretionary Earnings equals net profit plus owner salary, personal benefits, one-time expenses, depreciation, and interest. It represents the total economic benefit of owning the business. Most small GC acquisitions are priced as a multiple of SDE.

SDE = Net_Profit + Owner_Salary + Benefits + One_Time + Depreciation + Interest

EBITDA = Net_Profit + Depreciation + Interest

Revenue_Multiple = Based on company size (0.5x to 2.5x)

Adjusted_Multiple = Base_Multiple × (1 + Sum_of_Adjustments)

Valuation = Average of (Revenue × Multiple, EBITDA × 4, SDE × 2.5)

Adjustments matter more than the base formula. A GC with strong repeat clients, low owner dependence, and clean books will get a premium. A business dependent on the owner with one big client will get a discount. These adjustments can swing the value by 30-40%.

When To Use This

Exit planning. If you are thinking about selling your GC business in the next 1-5 years, start here. The calculator shows you what drives value so you can focus on improvements that increase your sale price.

Partnership buyout. When a partner wants to exit or you want to buy someone out, you need a starting number. This calculator gives both parties an objective baseline for negotiation.

Annual benchmarking. Run this calculator once a year to track how your business value is changing. If the value is flat or declining, the adjustment factors tell you exactly what to fix.

Frequently Asked Questions

How much is a general contracting business worth?

GC business values typically range from 0.5x to 2.5x annual revenue depending on size and profitability. Small GCs under $1M revenue trade at 0.5-1.0x revenue. Mid-size firms ($1M-$5M) trade at 1.0-1.5x. Large operations above $5M can command 1.5-2.5x. EBITDA multiples of 3-5x are also common.

What factors increase a contracting company's value?

The biggest value drivers are recurring revenue from repeat clients, diversified customer base, strong project management systems, licensed and certified staff, clean financial records, and consistent growth. Owner independence is critical -- if the business runs without the owner on every job, it commands a premium.

What is SDE and why does it matter for GC valuation?

SDE stands for Seller's Discretionary Earnings. It is net profit plus owner salary, personal benefits, one-time expenses, depreciation, and interest. SDE represents the true economic benefit of owning the business. Buyers use SDE to compare businesses because it normalizes for different owner compensation structures.

Should I get a professional appraisal for my GC business?

Yes. This calculator provides a reasonable estimate for planning purposes, but a professional business appraisal accounts for local market conditions, asset values, contract backlog, bonding capacity, and intangible factors that a formula cannot capture. For any transaction over $500K, a professional appraisal is well worth the investment.

Related General Contractor Tools

Business