SDE Multiple Valuation Calculator

About this calculator

Seller's Discretionary Earnings (SDE) is the standard profitability metric used to value small, owner-operated businesses — it's net income with the owner's salary, personal expenses run through the business, one-time costs, and non-cash items like depreciation added back in, showing the true cash benefit a new owner-operator would get. It's the small-business equivalent of EBITDA, used mainly for businesses valued under a few million dollars.

Business brokers and buyers price these companies as SDE × a multiple, where the multiple (commonly 2x-4x for most small businesses, higher for stable recurring-revenue models) reflects industry, growth, risk, and owner dependency. This calculator does that final multiplication, giving a quick ballpark valuation useful for business brokers, buyers, and owners sanity-checking an asking price before commissioning a formal valuation.