Most small business valuations in Colorado use one of three primary methods. Understanding which applies to your deal is essential before making an offer.
SDE Multiple (Seller's Discretionary Earnings)
Most common for businesses under M. SDE = net profit + owner salary + add-backs. A multiple of 2–3x SDE is typical for most small businesses in the Denver market.
Example: 50K SDE × 2.5x = 75K valuation
EBITDA Multiple
Used for larger businesses (M+). Multiples range from 3–6x depending on industry and risk profile. Common in Denver's growing service and technology sectors.
Example: 00K EBITDA × 4x = M valuation
Asset-Based Valuation
Used when a business has significant hard assets — real estate, equipment, inventory. Common in car washes, storage facilities, and laundromats along the Front Range.
Common in: laundromats, car washes, storage facilities
Revenue Multiple
Less reliable but used in some industries. Multiples of 0.5–2x annual revenue are common. Brokers sometimes use revenue multiples to justify inflated Denver market prices.
Warning: verify earnings, not just revenue
| Business Type | Typical Multiple | Key Value Drivers | SBA Eligible? |
|---|
| Car Wash | 4–6x EBITDA | Real estate, equipment, site count | Yes |
| Self-Storage | 5–7x EBITDA | Occupancy, cap rate, real estate | Yes |
| Laundromat | 2–4x SDE | Lease terms, equipment age | Yes |
| Cleaning Franchise | 2–3x SDE | Contract revenue, concentration | Yes |
| Service Business | 2.5–4x SDE | Owner dependency, recurring contracts | Yes |
| Restaurant / Bar | 1.5–3x SDE | Lease terms, real estate, staff | Conditional |
| Distribution Company | 3–5x EBITDA | Contract diversity, logistics | Yes |
How much is my business worth in Denver?
Most profitable small businesses in the Denver market sell for 2–5x their annual SDE or EBITDA. A business generating 00K in SDE might sell for 00K–00K depending on growth trend, owner dependency, real estate inclusion, and current market conditions in Colorado.
Can I trust the valuation a seller or broker provides?
No. Broker-presented EBITDA is almost always adjusted in the seller's favor. Add-backs are frequently inflated and revenue is sometimes presented at peak year. Always rebuild the financials independently — that's exactly what Deal Day does.
Does real estate affect business valuation in Denver?
Significantly. A business that owns its real estate is worth considerably more than the same business on a lease. In Colorado, real estate transactions within a business sale require a licensed real estate broker. MorCapital Advisors is licensed in Colorado.