Published 12 September 2026
Owners ask “what is my business worth” expecting one number. Buyers, lenders and business brokers arrive at a range, and the range is set by a handful of measurable things. This page explains the three methods that get used in Calgary, the multiples that show up in real transactions, and the items that move a valuation up or down before a listing ever goes to market. The What’s My Business Worth calculator applies the same logic to your numbers.
Start with the right earnings figure
Small-business value is a multiple of earnings, and the earnings figure has to be normalised first:
- Seller’s discretionary earnings (SDE) — net profit plus the owner’s salary and benefits, interest, depreciation, taxes and one-time or personal expenses run through the business. Used for owner-operated businesses, which is most of what trades under about $1 million in Calgary.
- EBITDA — earnings before interest, taxes, depreciation and amortisation, after a market-rate salary for a manager. Used once the business runs without the owner, typically above $1 million in value.
- Adjusted for the books you can prove. Cash sales that never hit the ledger are worth nothing on a valuation; buyers and lenders price what the tax returns show.
The three methods
- Earnings multiple (market approach). SDE or EBITDA times a multiple drawn from comparable sales. This is what decides the price of almost every restaurant, salon, retail store, trades business and franchise resale.
- Asset-based. Fair market value of equipment, inventory and leaseholds, less liabilities. Sets the floor for a business that is not profitable enough to justify an earnings multiple, and drives the price of asset-heavy operations (a truck-repair shop with lifts and diagnostic gear, for example).
- Discounted cash flow (income approach). Projected cash flows discounted to today. Used by Chartered Business Valuators (the CBV Institute is the Canadian designation) for larger or unusual businesses, litigation and tax reorganisations; rarely for a Main Street sale.
What multiples look like in practice
The largest published dataset of small-business sales is BizBuySell’s quarterly Insight Report (US transactions). For the second quarter of 2026 it reported a median sale price of $349,250 on median revenue of $692,087 and median cash flow of $155,921 — an average cash-flow (SDE) multiple of 2.7 and revenue multiple of 0.7. Restaurants had a median sale price of $205,000 and retail businesses $250,000, both with cash-flow multiples rising modestly year over year (BizBuySell Insight Report, Q2 2026).
Canadian data is thinner and mostly private, but Calgary transactions we see follow the same shape: owner-operated businesses trade at roughly two to three times SDE, with the low end for businesses that depend on the owner’s own hours and licences and the high end for ones with staff, systems, a transferable lease and several years of consistent tax-return earnings. Larger businesses with a management layer are priced on EBITDA multiples that are higher again, and asset-heavy businesses get a floor from their equipment.
Treat those as the starting range, not the answer. Two pizza restaurants with identical sales can close a full multiple apart.
What moves the multiple
- Lease. Term remaining, renewal options and the landlord’s willingness to assign. A restaurant with 18 months left and no option is a discounted restaurant.
- Owner dependence. If the customers, suppliers or licences are personal to the owner, part of the earnings leaves with the owner.
- Quality of records. Three years of clean financial statements and matching CRA filings; point-of-sale reports that reconcile to deposits.
- Staff. Trained employees who stay through the transition; written contracts; no undisclosed liabilities for vacation or severance.
- Franchise terms. Transfer fees, remaining term, and whether the franchisor approves the buyer — approval is a condition, not a formality.
- Equipment condition and ownership. Owned outright versus leased; age; compliance (Alberta Health Services, AGLC for liquor, fire).
- Concentration. One customer or one contract that makes up most of revenue is a risk buyers price.
- Confidentiality. Businesses marketed confidentially — name, address and financials released after an NDA — protect staff and customers and, in our experience, close at better prices than ones the whole street knows are for sale.
Asset sale or share sale
Most small Calgary businesses sell as an asset sale: the buyer buys equipment, inventory, goodwill and the lease assignment, and leaves the seller’s corporation (and its history) behind. A share sale transfers the corporation itself, which can let a seller use the lifetime capital gains exemption on qualified small business corporation shares — $1.25 million for 2025 and indexed to inflation (CRA) — but the buyer inherits every liability, so share deals price in more due diligence. Which structure suits a deal is an accountant-and-lawyer question, and it changes the number both sides will accept.
What a valuation is for
- Setting an asking price that a lender’s appraiser will support (buyers financing through the Canada Small Business Financing Program can borrow up to $1.15 million, with sub-limits of $500,000 for equipment and leasehold improvements and $150,000 for intangible assets and working capital — goodwill has to be justified).
- Pricing a partner buy-out.
- Deciding whether to sell now or to spend a year fixing the lease, the books and the owner dependence first — often the more profitable choice.
Frequently asked questions
How much is a restaurant worth in Calgary?
Usually a multiple of its seller’s discretionary earnings, with the equipment and leaseholds setting a floor; the lease term and the quality of the books decide where in the range it lands. Use the calculator, then talk to us with the last three years of statements.
Do I need a Chartered Business Valuator?
For a Main Street sale, no — a market valuation from a broker who sees closed transactions is what buyers and lenders expect. For tax reorganisations, disputes or larger companies, yes.
Does goodwill count?
Yes, when earnings support it. Goodwill that is not backed by documented earnings is where deals fall apart at financing.
How long does a sale take?
Confidentially marketed Calgary businesses commonly take three to nine months from listing to closing, most of it in due diligence and financing.
Sources: BizBuySell Insight Report, Q2 2026; Canada Revenue Agency, Line 25400 capital gains deduction (LCGE $1,250,000 for 2025, indexed); Innovation, Science and Economic Development Canada, Canada Small Business Financing Program parameters; CBV Institute.
Price it now with the business valuation calculator, then read the step-by-step buying guide and browse the current businesses for sale in Calgary.
