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What does "SDE" mean, as in "Great SDE" or "SDE Refer Trucking"?

What does "SDE" mean, as in "Great SDE" or "SDE Refer Trucking"?

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Answers (3)
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Maricopa County, AZ

Thank you Sean. I first ran into it in an ad mentioning "$220,000 SDE Refer trucking leases trucks ..." and when I tried to ask the advertizer what it meant, I had first to sign and fax a non-disclosure, which I didn't particularly want to go to the trouble to do. So, then I called up other adds with "SDE" mentioned, didn't see an explanation in any of them, and so, stumped, asked the community. Then I noticed it seemed to be associated with "cash flow," But, without you, I might have been at least a week coming up with Seller's Discretionary EARNINGS." Thanks again.

Dec 1, 2009
Sean Lacy
The Hatteras Group
New Hanover County, NC

When you see SDE in a business for sale ad, it usually stands for "seller's discretionary earnings" or "discretionary cash flow." All that means is the earnings before interest, taxes, depreciation plus the salary for one working owner and any discretionary perks such as a vehicle that is not necessary for the business or non-business travel, etc. Normally, small businesses are priced based on a multiple of that SDE number, typically 2-3x.

Hope this helps

Sean Lacy, CBI
Horizon Business Investments

Dec 1, 2009
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Maricopa County, AZ

OK. "SDE" relates to "Cash Flow," so it means "Seller's Discretionary E," Now, what's the "E" mean?

Dec 1, 2009

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