Tag
SDE
7 pages across every collection.
Answer··1 min
Can I add my salary back to EBITDA?
Only the portion above a market rate for the work you actually do. Adding the whole salary back assumes the buyer gets a free chief executive, which no buyer accepts.
Answer··1 min
What is SDE (seller's discretionary earnings)?
The total financial benefit one owner-operator takes from a business in a year — operating profit plus owner compensation, benefits and one-off costs added back.
Answer··1 min
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.
Answer··1 min
Is a 3x multiple good?
It depends on what it is three times. Three times EBITDA is low for most businesses above €500k of earnings; three times SDE is at the top of the range for a small one.
Answer··1 min
What multiple do small businesses sell for?
Most businesses under €1M of turnover sell for 2 to 3.5 times SDE. The figure that trips owners up is which earnings number that multiple applies to.
Answer··1 min
How do I calculate the value of my small business?
Four steps: normalise the earnings, pick the right earnings figure, apply a size-appropriate multiple, then adjust for debt and cash. Worked example included.
Guide··2 min
SDE vs EBITDA
Which earnings figure applies to your business, why the multiples attached to them are not interchangeable, and the €400,000 mistake owners make when they mix the two.