Business Valuation Calculator — SDE Multiples by Industry
What a small business is worth at the SDE multiples comparable businesses sold for in 2021-2025: low, likely and high price, a revenue cross-check and the asset floor.
By Konstantin Iakovlev · Updated September 2026 · Source: BizBuySell valuation benchmarks (businesses sold 2021-2025) and Insight Report Q2 2026; IBBA / M&A Source Market Pulse Q2 2026
Low (lower quartile)
$271,250
Most likely
$368,900
High (upper quartile)
$485,150
How the value is worked out
| Pre-tax net profit | $55,000 |
| Owner salary or draw (one owner) | $70,000 |
| Owner benefits and payroll taxes | $10,000 |
| Interest expense | $4,000 |
| Depreciation and amortization | $8,000 |
| One-time expenses | $3,000 |
| Personal expenses run through the business | $5,000 |
| Seller's discretionary earnings (SDE) | $155,000 |
| Multiples of SDE for Service business: low / median / high | 1.75 / 2.38 / 3.13 |
| Multiple after your answers | 2.38× |
| SDE × 2.38 | $368,900 |
| Asset floor (equipment + inventory − liabilities) | $50,000 |
Cross-checks
| Revenue × sector median revenue multiple | $355,000 |
| Your SDE margin vs the sector median | 31.0% / 30.7% |
| Brokers’ average for deals of this size (Market Pulse Q2 2026, 2.0× SDE) | $310,000 |
The price covers normal inventory, equipment and goodwill in an asset sale; the seller keeps the cash and receivables and pays off debts. The low and high figures are the lower and upper quartiles of businesses sold in 2021-2025 (BizBuySell); where your business falls depends on the answers above, which is our estimate within that range.
Use the Business Valuation Calculator — SDE Multiples by Industry above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Small businesses are bought and sold on a multiple of seller's discretionary earnings (SDE), the cash the business produces for one owner-operator, and this calculator prices yours the same way. It builds your SDE from your profit and the usual add-backs, applies the multiples at which businesses in your sector actually sold, and shows a low, most likely and high price with the checks a broker would run.
SDE is pre-tax net profit plus one owner's salary or draw, that owner's benefits and payroll taxes, interest, depreciation and amortization, one-time expenses and personal costs run through the business (IBBA glossary; BizBuySell). The multiples come from BizBuySell's reports on businesses sold from 2021 to 2025: the median service business sold for 2.38 times SDE, with the middle half between 1.75 and 3.13; restaurants for 1.85 (1.34 to 2.53), manufacturers for 2.75 and software, app and SaaS companies for 3.12. For comparison, the median small business sold in the second quarter of 2026 went for $349,250 on $155,921 of SDE. Your answers on owner involvement, sales trend, recurring revenue and the quality of your books move the multiple from the median toward the lower or upper quartile, the traits BizBuySell ties to each end; that placement is our estimate.
The price is for an asset sale on a cash-free, debt-free basis: it includes normal inventory, equipment and goodwill, while the seller keeps cash and receivables and pays off debts, and real estate is priced separately. Three cross-checks sit beside the result: the sector's median revenue multiple, your SDE margin against the sector's, and the average multiple brokers reported for deals of that size in the IBBA/M&A Source Market Pulse survey (2.0 times SDE under $500,000, 2.8 up to $1 million, 3.1 up to $2 million, then 4.0 and 5.8 times EBITDA). Above about $2 million, buyers price on EBITDA, which is SDE minus a market salary for the owner's job, and the asset value is a floor: a business that earns less than its equipment and inventory are worth sells for its assets.
Example: A Restaurant With $120,000 of SDE
- 1 Input: restaurant, annual revenue $720,000, SDE $120,000, every answer typical.
- 2 Restaurants sold from 2021 to 2025 went for 1.34 times SDE at the lower quartile, 1.85 at the median and 2.53 at the upper quartile, so the range is $160,800 to $303,600, most likely $222,000.
- 3 Cross-checks: the median restaurant sold for 0.33 times revenue, which gives $237,600; the SDE margin is 16.7% against a sector median of 16.8%; and brokers reported an average of 2.0 times SDE for deals under $500,000, $240,000.
- 4 That sits close to the $205,000 median price of restaurants sold in the second quarter of 2026. A restaurant with a manager in place and growing sales would move toward the $303,600 end.
Source: BizBuySell valuation benchmarks (businesses sold 2021-2025) and Insight Report Q2 2026; IBBA / M&A Source Market Pulse Q2 2026 · Last updated: September 2026
Frequently Asked Questions
How are small businesses typically valued?
What is SDE and why does it matter for business valuation?
What factors increase business valuation?
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