What Is a Business Worth With $200K Annual Revenue?
The Short Answer
A business generating $200K in revenue is typically valued at $200K-$600K using a 1-3x revenue multiple. Profit-based valuation using 2-4x earnings may yield a different result.
The Detailed Breakdown
Valuation estimated using revenue multiples and SDE multiples common for small service businesses.
| Calculation | Value | Assumptions |
|---|---|---|
| Revenue-Based (2x) | $400,000 | 2x annual revenue multiple for service businesses |
| Earnings-Based (3x) | $120,000 | 3x seller's discretionary earnings |
| SDE Method (3.5x) | $140,000 | SDE of $40K x 3.5 multiple |
Key Assumptions
- Service business with 20% net profit margin ($40K annual profit).
- Revenue multiples of 1-3x based on industry and growth rate.
- SDE (Seller's Discretionary Earnings) used for small businesses.
Adjust for Your Situation
Your $200K revenue business is likely worth $120K-$400K depending on profitability and growth prospects.
Use the Free CalculatorWhat Affects This Result
Profit Margin
Higher margins command higher multiples because buyers value cash flow.
Customer Concentration
If one client represents 30%+ of revenue, the valuation drops significantly.
Growth Rate
Businesses growing 20%+ annually earn premium multiples.