What is SDE and how is it different from profit?

Seller's discretionary earnings is the total financial benefit one full-time owner-operator takes from a business in a year. Start with net profit, then add back the owner's salary, interest, depreciation and amortization, one-time expenses, and any personal costs run through the business. It is almost always a much larger number than the profit on your tax return.

Is this a real business valuation?

No. It applies broad sector multiples to figures you enter, which is a useful orientation and nothing more. A certified valuation examines your contracts, customer concentration, working capital, equipment condition and financial quality. SBA lenders require an independent third-party valuation before funding an acquisition.

Why is the range so wide?

Because real transaction prices are. Two commercial cleaning companies with identical SDE can trade two turns apart based on whether the revenue is contracted, whether the owner is replaceable, and whether one customer is 40% of the book. The estimator adjusts for those factors, but only your actual financials settle it.

Do I have to give you my email to see the result?

No. The number appears on screen and the calculation runs entirely in your browser. Nothing you type is transmitted to us unless you choose to contact us.

Valuation estimator

What is my business worth?

Most small businesses sell for a multiple of seller's discretionary earnings, and the multiple depends far more on how the business is built than on what industry it is in. Enter your numbers below for a real range.

Seller's discretionary earnings (SDE)

Net profit, plus your salary, plus interest, depreciation and any personal expenses run through the business.

What kind of business is it?

Five things buyers actually price on

Can the business run for a month without you?A manager or supervisor already handles day-to-day operations and customer relationships.Is your largest customer under 20% of revenue?Customer concentration is the single most common reason a buyer or an SBA lender cuts a price.Is most revenue recurring or contracted?Contracts and repeat service agreements, rather than one-off projects won again each year.Are your financials on accrual books or reviewed statements?Clean, reconstructable records shorten diligence and remove the buyer's risk discount.Has revenue grown in each of the last three years?Consistent growth. Flat is not fatal; declining is priced accordingly.

Estimated value

Enter your SDE to see a range. Nothing you type here leaves your browser.

This is an orientation, not an appraisal. A real number depends on your contracts, your customer mix and your books.

Get a real number from us

Reference

SDE multiples by sector

Working ranges for owner-operated businesses doing $2M to $10M in revenue. Where you land inside the range is a function of the five factors in the estimator above.

Seller's discretionary earnings multiples by sector
Sector	SDE multiple	What moves it up
Janitorial and commercial cleaning	2.5× – 4.0×	Multi-year contracts with automatic renewal, low customer concentration, and supervisors who manage crews without the owner.
Pest control	3.5× – 5.5×	Recurring service agreements and high route density. Termite warranty liabilities and technician licensing move the number.
Landscaping and irrigation	2.5× – 4.0×	Maintenance contracts rather than one-off installs. Install-heavy revenue trades lower because it does not repeat.
Pool service and repair	2.5× – 4.0×	Route density and monthly billing. Phoenix routes are unusually valuable because the season never really ends.
Commercial painting and coatings	2.5× – 4.0×	Repeat commercial and property-management customers, an ROC license that transfers cleanly, and a backlog you can see.
Facilities and building maintenance	3.0× – 4.5×	Contracted scopes across multiple sites, plus reactive work that follows the contract.
Security services and monitoring	3.0× – 5.0×	Monitoring RMR is valued far above guard-hour revenue. The mix matters more than the total.
Staffing and workforce services	3.0× – 4.5×	Long-standing client relationships, gross-margin stability, and workers' compensation experience.
Light manufacturing and fabrication	3.0× – 5.0×	Proprietary product or tooling, diversified customers, and machinery that is not about to need replacing.
Specialty distribution and wholesale	3.0× – 4.5×	Exclusive lines or territories, and inventory that turns. Slow-moving stock is a discount, not an asset.
Logistics, trucking and last mile	2.5× – 4.0×	Contracted lanes rather than spot freight, driver retention, and fleet age.
HVAC, plumbing and electrical	3.5× – 6.0×	Service agreements and replacement mix. This is the most competitively bid category in Phoenix, so the top of the range is real but hard to reach without scale.
Other B2B and professional services	2.5× – 4.0×	Revenue that belongs to the company rather than to the owner personally.

Ranges reviewed 2026-08-26. For national context, the BizBuySell Insight Report reported a median sale price of $349,250 on median cash flow of $155,921 in Q2 2026 — an average of 2.7× cash flow across all reported transactions, most of which are far smaller than the businesses we buy.

Getting your inputs right

How to calculate your SDE

The multiple gets all the attention. The SDE figure is where most owners are wrong by six figures.

01Start with net income from your business tax return.
02Add back your own compensation — salary, distributions, and payroll taxes on them.
03Add back interest expense and depreciation and amortization.
04Add back one-time costs that will not recur: a lawsuit, a rebranding, a bad year for a piece of equipment.
05Add back personal expenses running through the business: vehicles, phones, travel, insurance, a family member on payroll who does not work there.
06Subtract anything that will need replacing under new ownership — for instance, if you also do the estimating and a buyer would have to hire an estimator.

Reality check

What the estimator cannot see

Working capital. Most deals require the business to be delivered with a normal level of receivables and inventory. That is negotiated, and it is real money.
Deal structure. A headline price with an earnout and a five-year seller note is not the same offer as less cash at close.
Real estate. If you own the building, that is a separate asset with a separate value — and often a separate lender.
Lender appetite. If a buyer needs an SBA loan, the price has to clear both a third-party valuation and a debt-service coverage test. We wrote about how that works.

Questions

Common questions

What is SDE and how is it different from profit?: Seller's discretionary earnings is the total financial benefit one full-time owner-operator takes from a business in a year. Start with net profit, then add back the owner's salary, interest, depreciation and amortization, one-time expenses, and any personal costs run through the business. It is almost always a much larger number than the profit on your tax return.
Is this a real business valuation?: No. It applies broad sector multiples to figures you enter, which is a useful orientation and nothing more. A certified valuation examines your contracts, customer concentration, working capital, equipment condition and financial quality. SBA lenders require an independent third-party valuation before funding an acquisition.
Why is the range so wide?: Because real transaction prices are. Two commercial cleaning companies with identical SDE can trade two turns apart based on whether the revenue is contracted, whether the owner is replaceable, and whether one customer is 40% of the book. The estimator adjusts for those factors, but only your actual financials settle it.
Do I have to give you my email to see the result?: No. The number appears on screen and the calculation runs entirely in your browser. Nothing you type is transmitted to us unless you choose to contact us.

Want the number that a buyer would actually pay?

Send three years of returns and a current profit and loss. We will rebuild your SDE line by line, show you every adjustment, and tell you within five business days what we would pay and why.

Send us your numbers See how it works