SDE & EBITDA Calculator
Enter the business's financials and add-backs to calculate Seller's Discretionary Earnings (SDE) and EBITDA, then apply an industry multiple to estimate a fair market value range.
SDE vs EBITDA: Which to Use?
Use SDE for owner-operated businesses under roughly $2M in asking price. SDE includes the owner's salary as available earnings — because a new owner-operator will pay themselves from that same pool.
Use EBITDA for larger businesses where a hired manager will replace the owner. EBITDA excludes the owner's salary since management is an ongoing cost the buyer will keep paying.
This calculator shows both. When in doubt, ask the broker or seller which metric they used to price the business — then verify their add-backs line by line against three years of tax returns.
What Moves the Multiple
The ranges above are wide because business quality varies enormously. Businesses at the top of their range have recurring revenue, low customer concentration, documented systems, and clean books. Businesses at the bottom are owner-dependent, have irregular cash flow, or carry deferred maintenance. Negotiate down from the midpoint if you see those risks; pay toward the top if you see genuine defensibility.
Next Step: Model the Deal
Once you have an earnings number and estimated value, model the full deal structure in the AcquireCalc deal calculator: how much seller financing can you negotiate, what assets can fund the purchase, and what's your true cash at closing?