SDE Walkthrough - what a buyer actually takes home.

SDE (seller's discretionary earnings) = net profit + owner salary + owner perks + non-recurring expenses. It is what a buyer actually takes home, and the base most small manufacturers are valued on. Enter your figures to compute it.

IBBA-standard 16-step walkthrough. Most owners undervalue by missing legitimate add-backs - or overvalue by adding back things buyers will reject. This walks through every line item with warning flags for aggressive add-backs.

IBBA-standard SDE methodology. Most owners undervalue their business by missing legitimate add-backs - or overvalue by adding back things buyers will challenge. Walk through each step; we calculate as you type.

Step 1: Start with Net Income

Annual revenue ($)

Net Income ($)

Steps 2-9: Owner add-backs

Owner salary ($)

Employer payroll tax on owner salary ($)

Owner health insurance ($)

Owner retirement ($)

Owner vehicle ($)

Owner cell/home-office ($)

Owner T&E (personal portion only) ($)

Owner life/disability ($)

Steps 10-12: Financial add-backs

Interest expense ($)

Depreciation ($)

Amortization ($)

Steps 13-16: Other add-backs (handle with care)

One-time non-recurring ($)

Above-market rent add-back ($)

Family on payroll (above-market portion) ($)

Other discretionary ($)

When buyers will audit every line item

SimpleGrid documents every add-back with source data.

Buyer asks "what was this $24,000?" - the answer is one query. Owners with defensible add-backs sell at the high end of their multiple range. Owners who can't document fall to the low end or get the add-back rejected entirely.

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