What is Seller Discretionary Earnings (SDE)?

Business valuation is both an art and a science. It’s important to understand the range of your business valuation and how you can leverage add-backs to greatly increase the valuation of your business.

Join us in this episode to learn when you’d want to list your business on the high or low end of your range, what is Seller Discretionary Earnings (SDE), how it is the starting point for most businesses and how to calculate it, as well as what you need to know about add-backs while valuating your business.

I list the different valuation methods you can use, including Discounted Cash Flow Method, Comparable Company Analysis, and Straight-line TTM Analysis. Then, I talk about the common one-time expenses that you can use as add-backs to add more value to your business. I'm joined by one of my clients Dana Derricks who was able to add $150k to his valuation in just a few seconds, they’re that significant! I then touch on the significance of marketing our clients to buyers by republishing and updating the sellers’ financials each month.

[RamsayboltonSnow]

Ima buyer at a pizza shop doing 532, 789 yearly and the discretionary earnings are 126, 766 so is that a basis I can figure would be the bottom line for profit being an owner operator?