Manufacturing Business Valuation - SDE-based with vertical-specific multiples.

A manufacturer is usually valued at SDE or EBITDA times a market multiple. Customer concentration, owner dependence, and margin quality move the multiple more than revenue does. Enter your numbers for an SDE-based estimate.

Most owners undervalue their business because they don't apply the right multiple, or overvalue it because they ignore the discount factors. This calculator uses BizBuySell + IBBA transaction data for vertical-specific multiples and applies the standard adjustment factors that drive a deal.

Your business

Annual revenue ($)

Annual net profit ($)

Owner total compensation ($)

Vertical

Years in business

Revenue trend (3 yr)

Adjustment factors (optional - increases accuracy)

EBITDA ($) if > $5M, switches to EBITDA-multiple methodology

Owner hours / week in business

Top customer % of revenue

Top 5 customers % of revenue

Recurring revenue %

Can business run without owner 30 days?

Equipment age

IP / proprietary processes

Geographic market

Real estate situation

Equipment replacement cost ($) for asset-value floor

Inventory value ($)

AR minus AP (net, $)

When you want a real valuation, not a ballpark

SimpleGrid shifts businesses from people-dependent to system-dependent - the single biggest valuation lever.

Owner-dependent businesses sell at 1.2-1.8x lower multiples than system-driven ones (Exit Planning Institute). Documented SOPs + ERP add 0.5-1.0x to multiples (IBBA). An ERP is the fastest way to shift left on the value scale.

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How manufacturing businesses get valued

Mid-market manufacturers below $5M EBITDA trade on Seller's Discretionary Earnings (SDE) multiples. Above $5M EBITDA, the multiple shifts to EBITDA. Both methods start with the same idea: a buyer pays a multiple of cash flow, adjusted for the riskiness and quality of the business.

What moves the multiple

Customer concentration (top customer over 25% = significant discount)
Owner dependency (over 50 hrs/week = discount; under 20 hrs/week = premium)
Management team (can it run without you?)
Recurring revenue (over 70% = premium)
Equipment age (under 3 yrs = premium; over 15 yrs = discount)
IP / proprietary processes (strong = premium)
Geographic reach (national = premium over local)
Documented SOPs + ERP system (premium)

FAQ

This says my business is worth less than I thought. What now?

The discount is real and the lift is achievable. Most of the value-killing factors (owner hours, customer concentration, no management team) are correctable in 18-36 months. Start with the biggest discount factor you have - that's where the highest IRR is on operational improvement.

How accurate is this?

Directional. The true value of a private business is whatever a specific buyer will pay in a specific deal. Use this to know the ballpark, not the exact number. For a real valuation, engage a CPA or business broker with manufacturing experience and recent transaction comps in your vertical.