InvestDeal
CALCULATORS

Seller’s discretionary earnings calculator

Earnings for one working owner, from pre-tax income and add-backs.

REPORTED RESULTS
$
$
ADD-BACKS
$
$
$
$
$
$
DEDUCTIONS
$
FOR THE EBITDA VIEW
$
Seller’s discretionary earnings
$395,000
16.5% of revenue
  • Net income before tax
  • Owner pay and perks
  • Interest and depreciation
  • One-time and other
Net income before tax$185,000
Add-backs$216,000
Non-operating income−$6,000
Seller’s discretionary earnings$395,000
Market salary for a general manager−$110,000
EBITDA$285,000

Owner-operated businesses are usually priced on SDE, and larger, managed businesses on EBITDA. The difference here is $110,000.

A buyer prices these earnings against comparable sales.Get your free valuation

Method and assumptions

An estimate for planning. A sale is priced and taxed on its own facts, confirmed by the seller’s advisors.

GUIDES
  1. 01SDE equals net income before tax, plus the owner’s salary, benefits and personal expenses, interest, depreciation and amortization, and one-time and non-operating expenses, less non-operating income.
  2. 02The calculation assumes one full-time working owner. Where a second owner works in the business, that owner’s pay is replaced with a market salary for the role rather than added back.
  3. 03EBITDA equals SDE less a market salary for a general manager to run the business in the owner’s place.
  4. 04A buyer accepts an add-back only where the financial statements and records support it.

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Your financials

IndustryPrecision manufacturing
Revenue$7.2M
Adjusted earnings$1.45M

How buyers price it (three ways)

Revenue multiple0.6 – 0.9×
EBITDA multiple4.5 – 6.0×
Adjusted earnings multiple3.8 – 5.1×
$0.0M – $0.0M

$1.45M adjusted earnings at 3.8 – 5.1×, the multiple this profile earns

Two things would move it before you sell: your largest customer is 38% of revenue, and most of the business still runs through you

What comparable sales cleared at (28 in your sector and size)
Median 4.2×
You, 4.6×

Get an instant valuation based on your financials and comparable sales with our model

How InvestDeal compares with a traditional sale

  • Buyer matches
    TRADITIONAL
    80% of businesses listed never sell
    50+
    Qualified buyer matches per business, on average
  • Time to interest
    TRADITIONAL
    9 to 12 months from listing to close
    30 days
    To initial buyer interest
  • Fees
    TRADITIONAL
    6%+ success fee, plus upfront fees or a retainer
    Success fee only
    $0 upfront, no retainer
  • Buyer reach
    TRADITIONAL
    Limited to one broker’s personal network
    Platform-wide matching
    Across active buyer demand
  • Valuation
    TRADITIONAL
    Asking price set by rule of thumb
    AI valuation models
    Trained for each industry, free for every owner

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WHAT YOU’LL GET
01. An initial value range
An estimate of what your business could sell for
02. Likely buyers
Which strategic and financial buyers may be interested
03. The sale process
Timing, next steps and what a sale involves
No upfront fees or retainer. Success fee only.

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