What SDE Means When You Sell an Owner-Operated Business
Seller’s Discretionary Earnings is the cash the business produces for one working owner after normal add-backs. For most Main Street companies in Middle Tennessee, buyers start with SDE, not a guess from a website. BridgePoint Business Group uses it as the starting point for a confidential valuation. It is a range, not a promise.
Read more about how we value an owner-operated business.
The usual add-backs are owner pay, personal expenses run through the company, interest, depreciation, and one-time costs that will not repeat. A buyer will test each one, so only real add-backs belong in the number.
Michael DeVault
Broker/Owner
BridgePoint Business Group
Check out our page on EBITA Earnings
Explore our Business Valuation guide or use the Free Valuation Calculator.
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