Buyer & Seller Tool
Seller's Discretionary Earnings (SDE) is the true economic benefit a single owner-operator extracts from a business. It's what buyers use to value owner-operated Australian businesses under $500K in profit. This calculator adds back owner salary, personal expenses run through the business, depreciation, interest, and one-off costs to give you the real SDE figure — and shows what a buyer would likely pay.
Use the most recent full financial year. All figures pre-tax.
Profit after all expenses, before tax
Salary you pay yourself from the business
Car, phone, travel, meals claimed through the business
Non-cash charge — added back in EBITDA
Legal disputes, one-time restructuring, non-recurring capex — things that won't happen again
SDE is calculated as: Net Profit + Owner Salary + Personal Expenses Run Through Business + Depreciation + Amortisation + Interest + One-Off Costs. It represents the total financial benefit to a working owner — the cash you actually get out of the business each year, regardless of how you've structured it for tax purposes.
SDE is the standard valuation metric for small businesses (typically under $1–2M EBITDA) where the owner is active in daily operations. EBITDA is used for larger businesses with professional management teams in place, because a buyer doesn't need to replace an owner-operator — they're buying a managed business. Many Australian brokers use SDE as the default for businesses under $5M in revenue.
Legitimate add-backs include: owner salary (what you pay yourself), personal expenses run through the business (car, phone, travel), non-cash charges (depreciation, amortisation), interest on debt that won't transfer to the buyer, and genuine one-off costs (legal disputes, renovation, non-recurring capex). Buyers will scrutinise add-backs heavily in due diligence — only include items you can evidence with receipts or ledger entries.
Australian owner-operated businesses typically sell at 2×–4× SDE. The multiple depends on industry, revenue size, growth rate, owner dependency, and asset quality. Businesses with strong systems, diversified customers, and recurring revenue command higher multiples. Hospitality and retail are often at the lower end (1.5×–2.5×); IT and professional services can achieve 3×–4.5×.
ThatDeal's done-for-you broker calls gather detailed financial information from brokers on your behalf — including normalised SDE figures, add-back schedules, and financial trend data. We flag when a broker's stated SDE looks inflated or when add-backs are aggressive. See how it works →