# How is a private business valued? · Horizon Answers

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# How is a private business valued?

Short answer

Most private businesses are valued as adjusted EBITDA times a multiple. The profit a buyer believes will continue is multiplied by a number that reflects risk and growth.

## What to know

-   Start with EBITDA, then add back one-time and owner-specific costs.
-   The multiple rises with recurring revenue, a strong team and low customer concentration.
-   Debt, cash and working capital adjust the final price you receive.

## What to do next

1.  1Pull 3 years of financial statements.
2.  2List every expense a new owner would not have.
3.  3Get an outside view of the multiple for your industry and size.

Last reviewed September 2026 by the Horizon team. General information, not legal, tax or financial advice.

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