What is SDE, and why every listing leads with it
Measured from the crawl of September 14, 2026 across 2,079 active Florida business listings. Computed when this page was built — not copied from a survey, and not a rule of thumb. It moves every week.
As of September 14, 2026, 25% of the 1,777 active Florida business-for-sale listings that publish seller's discretionary earnings advertise $75,000 or less — at or below what it would cost to hire a manager to run the business. The median published SDE is $139,434. Main Street Diligence, computed from 2,079 active listings on the Business Brokers of Florida MLS.
SDE stands for seller's discretionary earnings. It is the single number almost every small-business listing advertises, it is the number a valuation multiple gets applied to, and it is the number most likely to be quietly generous. Understanding how it is built is the difference between reading a listing and being sold one.
The plain definition
SDE is what the business earned for one full-time owner-operator, before that owner pays themselves. You start with net profit as the tax return reports it, then add back the things that exist because of how this particular owner runs the business rather than because of the business itself:
- The owner's own salary and payroll taxes — because the buyer will decide their own pay.
- Interest on the seller's loans — the buyer will have different debt.
- Depreciation and amortisation — accounting entries, not cash leaving the business this year.
- One-off costs that will not repeat — a lawsuit, a rebrand, a flood.
- Genuine personal expenses run through the business — the owner's car, their phone, a family member on payroll who does not work there.
The logic is reasonable: strip out this owner's personal choices so a buyer can see what the business would produce for them. Every one of those add-backs is also an opportunity to overstate, and nobody audits the list.
What SDE actually looks like in Florida right now
1,777 of 2,079 active listings publish an SDE figure. Here is the whole distribution — not an average, which one $4M outlier would distort:
| Percentile | Value | What it means |
|---|---|---|
| 10th | $40,198 | One in ten advertises less than this |
| 25th | $75,000 | A quarter of the market is at or below |
| 50th (median) | $139,434 | The middle listing |
| 75th | $262,472 | Top quarter starts here |
| 90th | $453,720 | One in ten advertises more than this |
Median revenue among those same listings is $560,514, so the typical business here keeps about 25 cents of SDE per dollar of sales. That ratio is a fast sanity check: a listing claiming a far higher margin than its industry normally earns is either exceptional or has been generous with its add-backs, and it is worth finding out which.
The number that should change how you read every listing
448 of the 1,777 listings publishing SDE — 25% — advertise $75,000 or less. That is at or under the $75,000 this site standardizes on as the cost of hiring somebody to run the place. Deduct that wage from the median listing and $139,434 becomes $64,434.
This matters because SDE is explicitly earnings for an owner-operator. It already assumes you are the labour. If the SDE is roughly what the job pays, you are not buying a business that earns money — you are buying a job, and paying a multiple of your own future salary for the right to do it. That can still be a fine decision. It is a very different decision from the one the listing appears to be offering.
Why the listing card says “SDE ÷ price” and not “ROI”
Every card on this site carries the published SDE as a percentage of the asking price. A $50,000 listing publishing $48,754 of SDE shows 98%. Until 25 August 2026 that cell was labelled ROI, and an outside reviewer made the point that the label was doing more work than the number could bear. It is a ratio of two figures a seller chose to publish, before the owner’s own labour, before financing, before taxes, before working capital, before any transaction cost, and before anyone has asked whether the earnings will repeat. Calling that a return implied a completeness it never had, and the tooltip saying so underneath was not a defence — people read the label.
So the cell now says what it is. SDE ÷ price is a screening ratio, the inverse of the asking multiple on the multiples page, and useful for exactly that. The word “return” is reserved for the calculator, where the figure is computed from your down payment, your loan, your closing costs and whose job the business is. If a number on this site ever reads as more certain than the data behind it, that is a defect, and the fix is the same one made here: rename it, in public, with the date.
The three questions that get you a real answer
"Can I see the add-back schedule?" Ask for SDE reconciled line by line back to the tax return. A prepared seller has this. If the add-backs are large relative to net profit, each one needs its own justification.
"Which add-backs will actually go away when I take over?" The owner's salary genuinely does. A family member doing real work does not — you will have to replace them, and that cost belongs back in the numbers. This single question moves the price on a surprising number of deals.
"What does the business earn after paying someone market rate to run it?" This is the lender's question, and it is the one that separates a business from a job. You can compute it yourself from any listing: SDE minus roughly $75,000.
See what listings publish What multiple gets applied to it What you can afford
Every figure underneath is seller-reported and unaudited. Our checks test arithmetic, not truth. How the screening works →