EBITDA & SDE Multiples Method

Market-based valuation using earnings multiples. EBITDA multiples for larger businesses, SDE multiples for smaller owner-operated companies.

When to Use Each Multiple

EBITDA Multiples

Best for larger businesses with professional management and minimal owner involvement.

Revenue typically $5M+

Professional management in place

Minimal owner compensation adjustments

SDE Multiples

Best for smaller, owner-operated businesses where owner compensation needs adjustment.

Revenue typically under $5M

Significant owner involvement

Owner compensation normalization needed

Small Businesses

Under $1M Revenue

1.5-3.0x

SDE Multiple Range

Mid-Market

$1M-$10M Revenue

2.0-5.0x

EBITDA Multiple Range

Larger Companies

$10M+ Revenue

4.0-8.0x

EBITDA Multiple Range

Get professional analysis using appropriate earnings multiples for your business size and industry