What is SDE and why is it used for small business valuation?

SDE (Seller's Discretionary Earnings) is the total financial benefit to a working owner-operator. It equals net profit plus owner salary, owner benefits, depreciation, amortization, and any one-time non-recurring expenses. SDE is the standard metric for valuing Main Street businesses under $5M because it captures the true economic value to a full-time owner.

How accurate is this free business valuation tool?

The tool uses industry multiples sourced from IBBA transaction data and applies risk adjustments based on your specific business characteristics. It provides a strong starting point for pricing conversations. For formal transactions, we recommend verifying with a Quality of Earnings analysis and consulting a certified business appraiser.

What industries does the valuation tool cover?

The tool covers 50+ industries including HVAC, landscaping, restaurants, retail, healthcare practices, SaaS, professional services, manufacturing, construction, e-commerce, and more. Each industry has its own set of transaction-based multiples.

Do I need to sign up to use the valuation tool?

No signup is required for your first valuation. Create a free account to run unlimited valuations and save your results.

What is a typical SDE multiple for a small business?

SDE multiples for Main Street businesses typically range from 1.5x to 4.5x depending on industry, size, and risk profile. Service businesses with recurring revenue and low owner dependency command higher multiples. Restaurants and retail typically trade at 1.5x-2.5x SDE, while home services trade at 2.5x-4x SDE.

Free Business Valuation Calculator

Succedence provides a free SDE-based business valuation tool for brokers and business owners.

Covers 50+ industries with IBBA-sourced transaction data. Provides low, mid, and high valuation range with risk adjustments, deal quality score, and broker rationale.

Please enable JavaScript to use the interactive valuation calculator.

FREE VALUATION TOOL

Free Business Valuation Calculator

Get a defensible valuation range for any small business in under 60 seconds. SDE-based methodology with IBBA transaction data across 50+ industries.

Loading valuation tool...