How Much Is My Business Worth? The 3-Step Calculation

A profitable French SME is usually worth 4 to 7 times its adjusted EBITDA (EBE retraité), less net financial debt. There is no official average for the sale price relative to EBITDA: the multiple depends mainly on the sector, the size and how recurring the revenue is (benchmarks below). For a retail or hospitality business, the market thinks in percentage of turnover, using trade benchmarks. Three steps give you a first range.

Three families of methods coexist (asset-based, market multiples, discounted cash flows) and our guide to valuation methods and benchmarks compares them in detail. To answer the question "what is my company worth", the three-step method relies on the EBITDA multiple. Everything starts with EBITDA, and the figure in your tax return is almost never the one a buyer will use.

Adjusting EBITDA answers a single question: what would this business generate in the hands of an ordinary buyer, without your personal arrangements? Four corrections account for most of the gap.

Owner compensation. It must be restated to the market cost of an employee doing your job, social charges included. An owner who underpays himself mechanically inflates EBITDA, while the buyer will have to pay a real manager. An owner who overpays himself crushes his own EBITDA and sells below what the business is worth.

Rent. If the premises belong to your SCI, the rent invoiced is rarely a market rent. A rent set too low flatters EBITDA and will be corrected by any buyer, who will eventually have to renegotiate the lease.

Non-recurring items. Insurance compensation, exceptional grant, settled litigation, relocation costs, an unusually large contract won once: anything that will not repeat comes out of the calculation, in both directions.

Personal expenses and finance leases. Family car, private travel, personal subscriptions: these are added back, provided they are documented. Finance leases are also restated, since they fund operating assets.

One last reflex: work on three financial years, never on the best one. A buyer purchases a trend, not a peak. The full mechanics are covered in our article on EBITDA and EBE restatements.

A multiple is the number of years of EBITDA a buyer agrees to pay upfront. It depends first on your activity.

Size matters too: the smallest companies are considered riskier, and that risk shows up as a lower multiple or, in a cash-flow approach, as a size premium in the required return; the DGFiP guide requires that premium to be justified by the company-specific analysis, never by market custom alone. Our sector multiple benchmarks break this down activity by activity.

If you run a retail or hospitality business, the logic changes: the market prices the fonds de commerce as a percentage of turnover. As an indication, a bakery trades at 60% to 110% of gross turnover, a traditional restaurant at 50% to 105% of gross turnover, a cafe or bar at 60% to 120%, a hair or beauty salon at 50% to 90%, a pharmacy at 60% to 120% of net turnover. These benchmarks are market reference points, never enforceable values: they do not remove the need to analyse the lease, the location and actual profitability. The detail sits in our fonds de commerce valuation benchmarks. The French tax authorities publish their own doctrine in a guide whose 2026 edition generally relies on a combination of asset-based value and profitability value, weighted differently depending on whether the block of shares carries decision-making power; in principle, these weightings allow a control premium and a minority discount to be set aside: DGFiP, guide de l'évaluation des entreprises et des titres de sociétés.

This step is often skipped, and skipping it creates misunderstandings in negotiations.

Adjusted EBITDA multiplied by the multiple gives enterprise value. It pays for the operating business, regardless of how it is financed. What you sell, however, are shares. So you deduct net financial debt: bank loans, outstanding finance leases, overdrafts, credit balances on shareholder current accounts, less available cash.

Two practical points. First, not all cash is surplus cash: part of it funds working capital and seasonality, stays in the business and does not come back to you. Only genuinely excess cash adds to the price. Second, your compte courant d'associé is not a share: it is a receivable against the company, repaid and negotiated separately. Confusing the two distorts the whole discussion.

Services SME, two shareholders, eight employees, steady growth.

The sector trades at 4 to 7 times EBITDA. The business is healthy but still depends heavily on its owner, so we retain 5x. Enterprise value: EUR 600,000. Net financial debt (loans less available cash): EUR 100,000. Equity value: EUR 500,000. Being prudent, we present a range of 4.5x to 5.5x, meaning EUR 440,000 to EUR 560,000 for 100% of the share capital.

The owner had started from reported EBITDA and a multiple of 5, which gave EUR 750,000 of enterprise value and EUR 650,000 for his shares. The EUR 150,000 gap comes from no exotic method: it comes purely from restatements, i.e. EUR 30,000 of EBITDA removed, multiplied by 5.

The multiple is not an input, it is a conclusion. Five factors move the cursor inside the range.

• Owner dependence. If clients, pricing and know-how rest on you alone, the buyer applies a lower multiple. This risk is counted only once: the DGFiP guide notes that it may already be captured through size.
• Client concentration. A client representing a significant share of turnover exposes the buyer to the risk of that client leaving, which may justify a discount, subject to the same caveat.
• Recurring revenue. Multi-year contracts, subscriptions, maintenance, high renewal rates: this is what moves you from the bottom to the top of the range, and what explains SaaS multiples.
• Size. The smaller the business, the more perceived risk weighs on the multiple.
• Liquidity. Unlisted, minority or transfer-restricted shares may carry an illiquidity discount, to be justified case by case, without double-counting the size premium, rather than applied by reflex.

Three of those five levers can be worked on before going to market: that is the point of the projects that make a business sellable.

A three-step range is enough to position yourself, to decide between selling and continuing, or to prepare a first meeting. It stops being enough in five situations.

• An actual sale. Facing an advised buyer, every restatement will be challenged, and you must think net of tax: capital gains on share disposals fall in 2026 under the flat tax of 31.4% (12.8% income tax and 18.6% social levies).
• Financing. A bank does not fund an intuition: it funds a dated, signed report and a demonstrated repayment capacity.
• A shareholder dispute. Where the law refers to article 1843-4 of the Civil Code for the price of a transfer or buy-back of company shares, or where the articles provide for such a transfer or buy-back without the value being fixed or determinable, the value is determined, if contested, by an expert appointed by the parties or, failing agreement between them, by the president of the judicial or commercial court ruling under the accelerated procedure on the merits (procédure accélérée au fond), with no appeal possible (Légifrance, Code civil article 1843-4). The expert applies the valuation rules laid down in the articles or in any agreement between the parties, where they exist. Better to prepare your position beforehand.
• A gift or an inheritance. The tax authorities can reassess an insufficient price for registration duties (Légifrance, LPF article L. 17). A value retained without a supporting file is a fragile value.
• A contribution in kind. In a SARL, an SAS or an SA, a contribution in kind in principle requires a commissaire aux apports (contributions auditor). At the incorporation of a SARL or an SAS, the shareholders may waive this unanimously if no contribution in kind exceeds EUR 30,000 and the total value of contributions in kind does not exceed half of the share capital; they are then jointly and severally liable to third parties for five years for the value retained for those contributions. In an SA, there is no equivalent exemption.

Two levels of deliverable exist: the avis de valeur, a short document setting out a reasoned range, from EUR 800 excluding VAT for SCI shares or a simple micro-business; and the full valuation report, substantiated and defensible before a third party, from EUR 2,500 excluding VAT for turnover below EUR 2 million and EUR 4,500 excluding VAT for turnover between EUR 2 million and EUR 10 million.

Across the files we handle, the gap between the number the owner has in mind and the range we produce almost always comes from the same three points: owner compensation never normalised, net debt forgotten, owner dependence never addressed. The sector itself rarely holds any surprise.

Second observation: the owner who gets the top of the range is not the best negotiator, he is the one who prepared his file two to three years earlier. Documenting procedures, taking personal expenses out, building a second management layer, diversifying the client portfolio: those projects weigh far more than any argument about the multiple.

Third observation: a free estimate does not replace a proper file, but it stops you wasting six months on an imagined value. Our SME valuation simulator gives an indicative range in two minutes from your EBITDA, your sector and your net debt.