How much is my business worth? A valuation guide for SMEs in Valencia

The most important question before selling

"How much is my business worth?" is the first question any owner asks when considering a sale. And the answer is not an exact number — it is a range that depends on many factors.

In this article we explain the most widely used methods for valuing small and medium-sized enterprises (SMEs) in Spain, with examples adapted to the market in the Valencian Community (Comunidad Valenciana).

Two main methods: SDE and EBITDA

SDE (seller's discretionary earnings)

SDE is the standard method for valuing small businesses (turnover below €1-2M) where the owner is a key part of the business. It is calculated as follows:

SDE = Net profit + Owner's salary + Personal expenses charged to the business

The value of the business is obtained by multiplying SDE by a market multiple that varies by sector. For example, according to the indicative estimate of Alcara Partners' valuation model:

• Technical services (HVAC, electrical): 2.0× – 3.5×
• Hospitality: 1.0× – 2.5×
• Pharmacies: 3.0× – 4.5×

EBITDA

For medium-sized and large businesses (turnover above €1-2M), EBITDA is the preferred metric. It reflects the operating capacity of the business regardless of its financial structure.

EBITDA multiples are usually higher than SDE multiples and vary significantly by sector and size. Illustrative example: a technical services business with EBITDA of €200,000 could be worth between €700,000 and €1,200,000.

Factors that increase value

Not all businesses with the same profit are worth the same. These factors can move the value significantly within the range:

• Recurring revenue: Maintenance contracts, subscriptions or annual agreements increase predictability and value.
• Low dependence on the owner: If the business runs without you, it is worth much more.
• Documented processes: A new owner can understand how everything works.
• Growth trend: A business growing at 10% a year is worth more than a stagnant one.
• Location: in Alcara Partners' valuation model, businesses in Valencia and Alicante receive a small positive adjustment.

Factors that reduce value

• High dependence on the owner: If you leave, the business suffers.
• Concentrated revenue: If a single customer accounts for more than 30% of your turnover.
• Pending litigation or hidden debts.
• A declining sector or one with strong price competition.

How can I get a quick estimate?

Our free valuation tool uses the multiples of Alcara Partners' valuation model to give you an indicative range in less than 3 minutes. All you need to know is your sector, turnover and approximate profit.

For a formal valuation that takes all the qualitative factors into account, we recommend speaking to an adviser. At Alcara Partners we carry out confidential, professional valuations tailored to your situation.

Conclusion

The value of a business is not a fixed number — it is the result of an informed negotiation between buyer and seller. But knowing the market range before starting the process gives you a fundamental advantage.

Start with a free valuation and take the first step.