What is SDE?
SDE stands for Seller's Discretionary Earnings. It is your profit plus your owner salary and add-backs.
Think of it as the total cash benefit the owner gets from the business each year.
What is a multiple?
The multiple is what buyers pay per dollar of SDE. Small businesses often sell for 2 to 4 times SDE.
Manufacturing and recurring-revenue businesses can get higher multiples.
How to find your number
Add up your profit, owner salary and add-backs to get your SDE. Then multiply by your industry multiple.
Vee does this for you in a free, confidential valuation. One client expected $700,000 and sold for $1.2 million.