SDE Calculator
Seller's Discretionary Earnings — the profit-based way small SaaS businesses actually get valued. Free, no signup.
SDE (Seller's Discretionary Earnings) is the standard way small businesses — including most micro SaaS sales — get valued on profit rather than revenue. Start with net profit, then add back anything a new owner wouldn't necessarily have to pay the same way.
Revenue minus all expenses, before any add-backs below.
A buyer running this solo isn't obligated to pay themselves the same way — add it back.
e.g. a phone plan, subscriptions, or travel booked as a business expense.
Financing is a buyer's decision, not a cost of running the product itself.
Non-cash accounting expense — rare for a lean SaaS, but include it if it applies.
e.g. a one-off legal bill, a migration project, or a one-time consulting fee.
This is an automated estimate for informational purposes only, not a professional valuation or appraisal.
What is SDE (Seller's Discretionary Earnings)?
SDE is a business's net profit plus add-backs for the owner's salary, personal expenses run through the business, interest, depreciation, and one-time costs — a measure of the total cash benefit a single owner-operator actually gets from the business, before financing and ownership-specific decisions.
Why use SDE instead of just net profit?
Net profit already has the current owner's salary and other owner-specific costs baked in, which understates what the business actually generates for whoever runs it. SDE adds those back so buyers can compare businesses on a level, ownership-neutral basis.
What's the difference between SDE and EBITDA?
EBITDA (earnings before interest, taxes, depreciation, and amortization) is standard for larger companies with management teams. SDE goes a step further by also adding back the owner's own compensation, which makes more sense for small, owner-operated businesses like most micro SaaS products, where the 'owner' and the 'operator' are the same person.
What multiple of SDE do small SaaS businesses sell for?
Roughly 2.5x-4x SDE is typical for small, sub-$10k-MRR SaaS businesses, though it varies significantly by category, growth rate, and how much of the operation is automated versus dependent on the owner.
Should I use SDE or a revenue multiple to price my SaaS?
SDE-based pricing makes more sense once a business has real, stable profit. For pre-revenue or barely-profitable products, a revenue multiple (or, for pre-revenue, an asset-based estimate) is usually more realistic, since SDE on little-to-no profit doesn't produce a meaningful number.
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