Valuing a micro-SaaS is not hard. It is one line of arithmetic, and then a long argument about one number in it. Most of the confusion in this market comes from people treating the argument as though it were the arithmetic.
The line is this:
That's it. A business earning $4,000 a month in profit makes $48,000 a year. At a 3× multiple it is worth $144,000. At 4× it is worth $192,000. The $48,000 is a fact you can verify. The multiple is a judgement, and that judgement is what the rest of this article is about.
Step 1: get to a defensible profit number
The profit figure in a small deal is almost always Seller's Discretionary Earnings (SDE) — revenue minus the costs genuinely required to run the business, with the owner's own compensation added back. Add back the founder's salary; do not add back the $340/month you spend on hosting, or the VA who answers support tickets, or the tools the product literally runs on.
The most common way sellers inflate a valuation is not lying about revenue. It's quietly moving a real cost into the "add-back" column. Watch for:
Contractor costs treated as optional. If a developer ships bug fixes every month, that's payroll, not an add-back.
Paid acquisition removed as "a growth experiment". If turning off ads shrinks revenue, ads are a cost of goods.
Support labour valued at zero because the founder does it themselves. Price what it would cost you to have it done.
One-off revenue counted as recurring. A lifetime-deal launch is not MRR.
Step 2: start from the base multiple
For small internet businesses in 2026, the honest starting ranges look roughly like this. These are trailing-twelve-month multiples on annual SDE, for deals under about $500k.
Business type | Typical range | What pushes it up |
|---|---|---|
Micro-SaaS, subscription | 2.5× – 4.5× | Low churn, organic acquisition, real moat |
Newsletter / media | 2× – 3.5× | Owned list, repeat sponsors, high open rate |
Content / affiliate site | 2× – 3× | Diverse traffic sources, aged domain |
Directory / marketplace | 2.5× – 4× | Two-sided liquidity, recurring listing fees |
Ecommerce | 2× – 3× | Owned manufacturing, brand search volume |
Anyone quoting you a single universal number is selling something. A $30k business and a $300k business in the same category do not trade at the same multiple, because the buyer pool is completely different.
Step 3: adjust for the six things that actually matter
Every point of multiple above or below the base comes from risk. Here is the full list of what moves it, roughly in order of impact:
Churn. Under 3% monthly is excellent, 5% is normal, over 8% means you are buying a leaky bucket and the multiple should reflect that.
Customer concentration. One customer at 30% of revenue is not a business, it's a contract with an expiry date you can't see.
Traffic concentration. 90% of signups from one Google keyword is one algorithm update away from zero.
Owner dependency. If the founder is the sales team, the support team and the brand, you are not buying a business — you are buying a job you cannot do.
Growth trend. Twelve months of flat revenue is worth meaningfully less than twelve months of 4% monthly growth, even at identical current profit.
Transferability. Custom infrastructure, an undocumented codebase or a payment processor that won't transfer all cost real money to unwind.
A worked example
A B2B scheduling tool: $6,200 MRR, $4,900 monthly SDE after hosting and a part-time support contractor. Annual SDE is $58,800. Base multiple for a micro-SaaS: call it 3.2×.
Monthly churn 2.1% — +0.4×, that's genuinely good retention.
Largest customer 6% of revenue — neutral, healthy spread.
68% of signups from organic search on one keyword cluster — −0.3×.
Founder handles all support, ~5 hours a week, undocumented — −0.2×.
Revenue up 22% year over year — +0.3×.
Adjusted multiple: 3.4×. Valuation: roughly $200,000. Notice that the arithmetic never got harder — every step was an argument about risk, priced.
What buyers will do to your number
Sellers consistently make two errors. The first is valuing on revenue instead of profit, which overstates the price by however much the business costs to run. The second is pricing in growth that hasn't happened yet — a buyer pays for the trailing twelve months, and treats your roadmap as their upside, not your asking price.
The counter-move is not a better argument. It's evidence. A seller who can show verified revenue straight from Stripe and verified traffic straight from analytics removes the buyer's single biggest discount: the risk that the numbers aren't real. That is worth more multiple than any pitch deck.