What Is My Business Worth? A Plain-English Guide to Valuing a New England Small Business

You've spent fifteen or twenty years building something real. Maybe it's a specialty contractor business in Waltham, a SaaS company in Cambridge, or a distribution outfit along the Route 128 corridor. Now, whether you're two years from selling or just curious, one question keeps surfacing: what is my business worth? This plain-English guide to valuing a New England small business will give you an honest framework — the same one we use when advising owners across Greater Boston.

Here's the short answer: your business is worth what a qualified buyer will pay for it. But that number isn't random. It's driven by a handful of factors you can understand, measure, and in many cases improve before you ever go to market.

How Small Business Valuation Actually Works

Forget the online calculators. Most of them spit out a number based on national averages and revenue alone. That's like pricing a house in Wellesley using data from rural Ohio.

The standard approach for businesses in the $750K to $10M range is a multiple of Seller's Discretionary Earnings (SDE) or, for larger and more structured companies, a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization).

Here's the basic formula:

• SDE or EBITDA × Industry Multiple = Enterprise Value

SDE starts with your net income and adds back your salary, one-time expenses, personal perks run through the business, and non-cash charges like depreciation. This is called financial recasting, and it's where most owners leave significant money on the table. A sloppy recast can understate your earnings by 20-40%.

The multiple is where things get interesting. For a Main Street business doing under $1M in SDE, you might see multiples of 2x to 3.5x. A more scalable, process-driven company with $1.5M+ in EBITDA could command 4x to 6x or higher, depending on industry and growth trajectory.

What Drives Your Multiple Up — Or Down

Two businesses with identical revenue can sell at wildly different prices. The difference comes down to risk and transferability. Here's what buyers in the Boston market (and nationally) evaluate:

• Owner dependence. If you disappear and the business collapses, that's a risk discount. If you have a management team that runs day-to-day operations, that's a premium.
• Revenue concentration. One customer accounting for 30%+ of revenue will scare buyers. Diversified revenue across dozens of clients is far more attractive.
• Recurring revenue. Subscription models, maintenance contracts, retainers — anything predictable commands a higher multiple than project-based or one-time sales.
• Growth trend. Three years of flat revenue tells one story. Three years of 10-15% annual growth tells a very different one.
• Clean financials. If your books are a mess, buyers assume the worst. Professionally prepared financials with clear add-backs signal credibility.
• Industry and location. A healthcare IT firm in Cambridge will attract different buyers (and multiples) than a landscaping company in Quincy. Both can be great businesses — but the buyer pools and competitive dynamics differ.

We recently worked with the owner of a B2B services company in Needham. Revenue was $3.2M, but the owner was doing everything — sales, operations, client management. Initial buyer interest reflected a 2.8x multiple on roughly $600K in SDE. After twelve months of building a small leadership team and documenting processes, that same business attracted offers at 3.6x on $720K in recast SDE. The difference in sale price: over $900,000.

That's why asking