Evaluating a business

What is SDE, and how is it calculated?

Seller's Discretionary Earnings is the number a small business's asking price is built on. How it's calculated, how it differs from EBITDA, and where add-backs inflate it.

6 min read

Add-backs: which ones are legitimate, and which are red flags

Owner pay, benefits and documented one-off costs are fair add-backs. Recurring 'one-time' costs, a working relative's salary and cut marketing are not. One test settles each.

7 min read

SDE multiples: what sellers are actually asking

Median asking multiples from 3,768 live listings: 2.4× SDE overall, rising to 4.2× for physical businesses earning $1M+, plus the spread by category.

7 min read