SDE (Seller's Discretionary Earnings) Calculator
Calculate true owner benefit for small business valuation
Business Financials
Enter net income and owner add-backs
SDE vs EBITDA: SDE is used for small businesses where owners actively work. It shows total benefit to owner/operator. Typical multiples range from 2-3.5x SDE.
Understanding SDE
What is SDE?
- Definition: Total financial benefit available to one full-time owner-operator
- Best For: Businesses with revenue under $5M where owner works in business
- Includes: Profit + Owner compensation + Benefits + Discretionary expenses
- Common Add-Backs: Owner salary, benefits, personal expenses, one-time costs
Valuation Multiples
- 1.5-2.5x SDE: Small, owner-dependent businesses
- 2.5-3.5x SDE: Established businesses with systems
- 3.5-4.5x SDE: Strong businesses with growth potential
- Higher Multiples: Require scalability, low owner dependency