💼 Business Exit Planning

What Is Your Business Actually Worth?

BizEquity charges $500 for a valuation report. We give you the same SDE-based estimate free — industry multiples, factor analysis, and what it means for your retirement.

📊 SDE Breakdown 🏭 Industry Multiples ⚡ Multiple Factors 🏖️ Retirement Bridge 30 Industries

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2–5x
Typical SDE multiple for SMBs
$500+
BizEquity charges for this report
10,000+
Business sales analyzed annually (BizBuySell)
78%
Owners don't know their business value
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Business Valuation Estimator

SDE-based · Industry multiples · 30+ business types

Your Estimated Business Valuation Range
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Low — Midpoint — High
🧮 SDE Calculation
Seller's Discretionary Earnings — the metric buyers use to value owner-operated businesses.
📈 Your Valuation Multiple
Industry baseline adjusted for your specific business factors.

🏖️ What This Means for Your Retirement

Using the 4% rule — every $1M you sell generates $3,333/month in sustainable retirement income.

Ready to Get a Formal Valuation?

A certified business appraiser or M&A advisor gives you a defensible valuation for lender financing, partner buyouts, or going to market. Our vetted broker partners specialize in SMB exits ($500K–$50M).

Find a Business Broker → Plan Post-Sale Retirement →

SDE Multiples by Industry (2026)

Benchmarks from BizBuySell quarterly reports and IBBA market pulse surveys. Multiples reflect closed transactions for businesses under $5M revenue.

Industry Low Multiple Mid Multiple High Multiple

How Business Valuation Actually Works

What brokers use — and what most owners don't know.

SDE vs EBITDA — Which Applies to You?

Under $5M revenue: SDE is standard. SDE adds back the owner's total compensation because a new buyer (often owner-operator) will replace your salary with their own. Above $5M: EBITDA multiples take over, and the business is valued more like a portfolio investment. If you're under $5M, don't let anyone value you on EBITDA — you'll leave money on the table.

The Owner Salary Add-Back Is the #1 Undercount

Most owners understate what they "take out" of the business. Include: W-2 salary, S-corp distributions, health insurance premiums, vehicle allowance, retirement contributions (SEP IRA, 401k), cell phone, and personal travel run through the business. For many owners, this number is $80K–$200K and directly adds to SDE — and then to the sale price at 3x that add-back.

What Kills Your Multiple (and What Saves It)

Multiple killers: high owner dependency (you ARE the business), revenue concentration (one customer = 40% of sales), declining revenue (2+ years), and under 3 years in operation. Multiple boosters: strong management team that runs without you, diversified customer base (largest customer under 15% of revenue), consistent growth, and 10+ years of operating history with clean books.

Real Estate: Include or Exclude?

Almost always exclude. Real estate values at cap rates (5–8x NOI) — much lower than business multiples. Bundling forces the buyer to value the building on business logic, not real estate logic. Better approach: sell the business, lease the property back to the buyer on a triple-net lease (you keep a steady income stream), or sell the property separately to a real estate investor.

The "3 Years of Clean Books" Premium

Buyers pay a 0.3–0.5x premium for clean, audited financials going back 3 years. Why? It removes the risk discount buyers apply to murky numbers. If you're planning to sell in 3 years, start separating personal expenses from business now. This one change — clean books vs messy books — can be worth $100K–$500K on a mid-size SMB sale.

Timing Your Sale for Maximum Value

Sell at the top of a growth curve, not after it. A business with 3 years of 15% YoY growth commands a premium multiple. A business with "we were growing but last year was flat" gets buyer skepticism baked in. If you know you want to exit in 3–5 years, this is the time to invest in growth, not pull back. Buyers pay for trajectory, not just trailing 12-month performance.

Common Questions

The questions business owners ask before their first broker conversation.

How much is a small business worth?
Most small businesses sell for 2–5x their Seller's Discretionary Earnings (SDE). SDE equals net profit plus the owner's total compensation plus non-cash add-backs. A restaurant with $200,000 SDE typically sells for $400,000–$600,000 (2–3x). An HVAC business with the same SDE might sell for $500,000–$800,000 (2.5–4x) due to stronger industry multiples. The exact multiple depends on your industry, growth trend, owner dependency, and customer base.
What is Seller's Discretionary Earnings (SDE)?
SDE is the primary valuation metric for owner-operated businesses under $5M in revenue. It's calculated as: Net Profit + Owner's Salary & Benefits + Add-backs (depreciation, amortization, one-time expenses, personal items run through the business). SDE represents the total economic benefit an owner derives from the business annually. Buyers pay a multiple of SDE to acquire that earning stream — effectively purchasing X years of income.
What industries have the highest business sale multiples?
Highest multiples in 2026: Tech/SaaS (4–8x SDE), Medical/Dental practices (3–5.5x), Pest Control (3–5.5x), Veterinary practices (3.5–6x), Self-Storage (3.5–7x). Lowest multiples: Restaurants (2–3x), Retail (1.5–2.5x), Salons/Spas (1.5–2.8x). The difference comes down to recurring revenue, scalability, owner dependency, and buyer demand. SaaS with locked-in MRR is worth 4x more than a restaurant with daily customer churn.
What increases the value of a business before selling?
Four proven multiple drivers: (1) Reduce owner dependency — if the business runs without you, buyers pay significantly more. High owner dependency cuts 0.3–0.5x from your multiple. (2) Diversify customers — concentrate risk below 15% per customer. (3) Show growth — 2+ years of growing revenue adds 0.25–0.4x. (4) 3 years of clean, audited books removes the risk discount buyers apply to murky financials, worth 0.3–0.5x on its own.
Should I use a business broker or sell myself?
For businesses under $1M, some owners sell themselves using BizBuySell. Above $1M, a broker typically pays for themselves — they bring qualified buyers (not tire-kickers), run a competitive process (which drives up price), handle due diligence management, and know how to structure deals. Expect to pay 8–12% broker commission on businesses under $5M. On a $2M deal, a broker who negotiates $200K more pays for themselves twice over.
How long does it take to sell a business?
Average time from listing to close: 6–12 months for SMBs. Breakdown: 1–2 months to prepare financials and CIM (confidential info memo), 2–4 months to find qualified buyers and get LOIs, 2–3 months of due diligence and deal structuring, 1 month to close. Well-prepared businesses with clean books and strong financials close faster. Rushed sales to unprepared buyers are how owners leave 20–30% of value on the table.

Plan the Retirement Side

Knowing your valuation is step one. Step two is knowing what it buys you in retirement.

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Post-Sale Retirement Bridge
Map your sale proceeds to income, locations, healthcare, and taxes.
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When Can I Retire?
Calculate your exact retirement date from savings and income.
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Retirement Tax Optimizer
Roth conversions, RMDs, withdrawal order, business sale taxes.
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Health Insurance Navigator
ACA, COBRA, and Medicare bridge before 65.
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Expat Retirement Guide
Where $3,000/month goes further than $8,000 back home.
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Social Security Optimizer
When to claim for maximum lifetime income.
This tool provides educational estimates only — not financial, tax, or legal advice. Valuations are estimates based on industry benchmarks and may differ materially from formal appraisals. Consult a certified business appraiser (CBA) or licensed M&A advisor before making decisions. Affiliate disclosure: RetireStack may earn commissions on partner referrals. Full disclosure →