There is no single number that is “the value” of a private business. What exists is a range, arrived at from several directions, and a negotiation inside it.
So this calculator runs five standard methods at once — revenue multiple, EBITDA multiple, price/earnings, dividend yield and a discounted cash flow — and shows you the spread rather than one confident figure. Fill in only the methods that suit your business; the ones you leave blank are excluded rather than counted as zero.
What you will need: last year’s revenue, EBITDA and net profit, any dividends paid, and — for the DCF — a cash-flow forecast and the return a buyer would expect.
Every method, side by side
Method
Value
Basis
The DCF, year by year
Year
Cash flow
Discount factor
Present value
The five methods, and when each one is the right lens
Method
How it works
Suits
Revenue multiple
Revenue × a multiple
Early-stage or loss-making businesses, and anything with recurring subscription revenue
EBITDA multiple
EBITDA × a multiple
The usual starting point for a profitable SME — it strips out financing and tax differences
Price / earnings
Earnings × a multiple
Stable, mature businesses where profit is predictable
Dividend yield
Dividend ÷ expected yield
A minority stake, or a buyer who is buying income rather than control
Discounted cash flow
Future cash, discounted to today
Businesses whose future looks materially different from their past
Reading the range rather than the number
The methods will disagree, and the disagreement is the useful part.
A tight range means the methods corroborate one another — a defensible position to negotiate from.
A wide range usually means one of the inputs is doing too much work: an optimistic multiple, or a forecast the history does not support. The calculator flags a spread of more than 2.5× for exactly that reason.
The midpoint is a median, not an average, so one aggressive method cannot drag the whole result with it.
How the discounted cash flow is built
Each forecast year is discounted back to today at your chosen rate, then a terminal value represents every year after the forecast, using the perpetual growth (Gordon Growth) model:
Terminal value = final year cash flow × (1 + growth) ÷ (discount rate − growth)
Two things follow from that formula, and the calculator enforces both:
The growth rate must be below the discount rate. If it is not, the formula has no finite answer — so the DCF is excluded and says why, rather than printing a number someone might carry into a negotiation.
The terminal value usually dominates. On a five-year forecast it is often more than half the total, which means your assumption about growth in perpetuity matters more than any single forecast year. Treat it with suspicion.
Choosing a multiple honestly
The multiple is where most valuations go wrong. It is not a constant; it is a summary of risk.
Size. Smaller businesses trade on lower multiples. A company earning S$200,000 will not command what one earning S$2 million does.
Customer concentration. If one client is a third of revenue, a buyer prices that risk in.
Owner dependence. If the relationships, the technical knowledge or the sales all sit with the owner, much of what is being sold walks out of the door on completion.
Recurring versus project revenue. Contracted, renewing revenue is worth materially more than the same amount won afresh each year.
Listed comparables are a ceiling, not a benchmark. A private business is normally discounted 20–40% against a listed peer for illiquidity alone.
What this calculator deliberately does not do
It values the business, not the equity, and it is an indication rather than an opinion. A valuation you can rely on for a transaction, a dispute or a filing also has to:
bridge from enterprise value to equity value — deduct debt, add surplus cash and non-operating assets;
normalise the earnings — remove owner’s above-market remuneration, one-off items and related-party charges;
weigh the methods rather than list them, according to what the business actually is;
apply discounts for lack of control or marketability where the stake being valued warrants them;
be documented and signed by someone accountable for the conclusion.
When you need a valuation you can rely on
Common triggers: selling or buying a business, admitting or buying out a shareholder, a divorce or estate matter, a share-based incentive scheme, raising investment, or a dispute where the number will be tested by someone else’s adviser.
3E Accounting prepares business valuations for these purposes, and will tell you plainly where the range is wide and why. If the figure above is going to inform a real decision, talk to us before you commit to it.
