What is my company worth? How investors value an SME
Step 1: adjusted EBITDA
The starting point is the profit the company generates on a sustainable basis. EBITDA for the last two to three years and the current year is adjusted for one-off effects:
- One-off items, such as a gain from selling a machine or one-off legal costs.
- Owner’s salary: a salary above or below the market level is adjusted to what employed management would cost.
- Private costs run through the company.
- Rent: if you own the property privately, a market rent is applied.
Step 2: the multiple
Adjusted EBITDA is multiplied by a multiple. For orientation, the current ranges for smaller mid-sized companies in the German market:
| Industry | EBITDA multiple |
|---|---|
| Main and ancillary construction (trades) | 4.4–5.8 |
| Real estate services and facility management | 5.0–6.9 |
| Business services (B2B) | 5.0–7.2 |
| Telecommunications and infrastructure | 5.7–7.2 |
| Electrical engineering and electronics | 5.7–7.6 |
| Healthcare: care and service providers | 6.0–8.1 |
Source: DUB SME Multiples, small cap (EUR 5–50m revenue), Q3 2026. For companies below EUR 5m revenue the values are lower, around 3.7–5.0 in the trades. For Swiss SMEs the ranges are a useful guide, but they do not replace a valuation of the individual company.
Where your company sits within the range depends mainly on these points:
- Size and growth in recent years
- Margin compared with the industry
- Share of recurring revenue, for example from service and maintenance contracts
- Dependence on individual customers, which often becomes critical above 20 per cent of revenue from one customer
- Dependence on the owner and strength of the second management level
- Investment needs, for example for vehicles, machinery or IT
Step 3: from enterprise value to purchase price
The multiple gives the enterprise value of the business, excluding debt and cash. For the price of the shares, bank debt is deducted and excess cash added. Working capital is also checked against a normal level. Non-operating assets such as a private property are treated separately.
| Example with made-up figures | CHF |
|---|---|
| Adjusted EBITDA | 1.5m |
| Enterprise value at a multiple of 5.5 | 8.25m |
| less bank debt | −1.5m |
| plus excess cash | +0.5m |
| Purchase price for 100 per cent of the shares | 7.25m |
Other methods
Capitalised earnings or DCF method: values future profits or cash flows, discounted to today. It is common for larger companies and expert opinions, but laborious for a first assessment.
Practitioner’s method: in Switzerland, the tax authorities usually value unlisted shares for wealth tax with this method: twice the capitalised earnings value plus the net asset value, divided by three. It is rarely decisive for a sale. The tax value can differ considerably from the market value.
How evo Capital values a company
We follow exactly this approach. The starting point is adjusted EBITDA, together with the customer structure, dependence on individuals, investment needs and growth opportunities. We give a first indication of value within five working days of the first conversation and explain openly how we arrived at it.
How to increase the value of your company
- Keep accurate, up-to-date figures, ideally with monthly accounts.
- Build a second management level so the business does not depend on you alone.
- Reduce dependence on large individual customers.
- Expand recurring revenue, for example with service and maintenance contracts.
- Do not postpone investment, and separate private costs from the company.
Frequently asked questions
What is a company with 1 million EBITDA worth?
It depends on the industry, size and quality of earnings. At a multiple of 5, the enterprise value is about 5 million, from which net debt is deducted. For very small companies or those highly dependent on the owner, the multiple is lower; for fast-growing companies with recurring revenue, it is higher.
What is the difference between enterprise value and purchase price?
Enterprise value applies to the business excluding debt and cash. You get the purchase price for the shares by deducting bank debt and adding excess cash.
What documents does an investor need for a first valuation?
Usually the annual accounts for the last three years, current figures for this year, an overview of the largest customers and the number of employees. For the first conversation with evo Capital you do not need any documents yet.
Why do the tax authority and an investor value differently?
For wealth tax, the tax authority usually applies the practitioner’s method, a schematic approach. An investor values what the company can earn in the future. The two values can differ considerably.
This page provides general information and does not replace individual legal, tax or financial advice. Our disclaimer applies. This English version is provided for convenience; in case of discrepancies, the German version prevails.
Let’s talk about your company.
A first conversation takes an hour, is confidential and costs you nothing. Write to info@evo-capital.ch or call +41 76 625 48 40