Should I use SDE or EBITDA?
SDE if one owner works full time in the business and the buyer will replace them personally. EBITDA once a management layer exists. The multiples are not interchangeable.
SDE if one owner works in the business full time and a buyer would step into that role personally — typically under about €1M of turnover. EBITDA once a management layer runs day-to-day operations, and always when a fund or strategic buyer is involved.
The deciding question
Will the buyer do the owner's job themselves, or pay someone to do it? If they will do it themselves, the owner's salary is not a cost to them, and SDE is the honest figure. If they will hire, it is a cost, and EBITDA is.
Why mixing them is expensive
- SDE
- €268,000
- correct multiple: 2–3.5×
- At 2.75× SDE
- €737,000
- realistic
- At 5× (an EBITDA multiple)
- €1,340,000
- not a price anyone will pay
Owners arrive at a broker with the second figure, spend nine months discovering it is not real, and often finish worse than if they had started honestly.
If you are between the two
Calculate both. The gap between them is what your own involvement is worth in the sale — useful information regardless of which figure you eventually present, and a good indicator of whether reducing owner dependence is where your next twelve months should go.
SDE vs EBITDA has the full comparison; EBITDA multiple explained covers the multiple once you are on the EBITDA side.