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Practical guides for acquiring small businesses

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What Is SDE? Seller's Discretionary Earnings Explained for Business Buyers

April 6, 2026·10 min read

Seller's discretionary earnings (SDE) is the single most important metric when buying a small business. Learn what SDE is, how to calculate it, common add-backs, and why it matters more than EBITDA or net income for SMB acquisitions.

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