SDE Calculator
Calculate your Seller's Discretionary Earnings — the total financial benefit to an owner-operator, and the standard valuation metric for businesses under $1M in earnings.
Enter Your Numbers
Bottom-line profit from your P&L
Total salary paid to yourself
Health insurance, retirement, etc.
Car, phone, meals, travel, personal expenses
Loan interest payments
Non-cash expenses
Lawsuits, moving costs, equipment failures
What is SDE?
SDE (Seller's Discretionary Earnings) represents the total economic benefit available to a single full-time owner-operator. It's calculated by adding back the owner's salary, benefits, and personal expenses to the business's net profit.
SDE vs. EBITDA: Which Should You Use?
Use SDE if you're an owner-operator of a business earning under ~$500K in profit. Use EBITDA if your business has professional management in place or earns over $500K. The key difference: SDE adds back the owner's full compensation; EBITDA does not.
Typical SDE Multiples
- 1.5–2.5x: Retail, restaurants, owner-dependent service businesses
- 2.0–3.0x: Established service businesses, trades, e-commerce
- 2.5–4.0x: Professional services, agencies, niche manufacturing
- 3.0–5.0x: SaaS, technology, businesses with recurring revenue
Want to know which factors move your multiple higher? Take the free exit readiness assessment to find out.