How We Value an Owner-Operated Business in Middle Tennessee
How We Value an Owner-Operated Business in Middle Tennessee
Most Main Street companies are not valued by a website guess. If you still run the business, buyers usually start with Seller’s Discretionary Earnings. BridgePoint Business Group uses that number as the starting point, then looks at whether a buyer can actually run the company after you leave.
Start with SDE
Seller’s Discretionary Earnings is the cash the business produces for one working owner after normal add-backs. Owner pay, personal expenses run through the company, interest, depreciation, and one-time costs are the usual adjustments. The point is a clean earnings number, not a higher one.
What usually gets added back
Typical add-backs include the owner’s salary, personal expenses paid by the company, interest, depreciation, and a one-time cost that will not repeat. A buyer will test these. If the add-back is not real, it does not belong in the number.
When the number is EBITDA instead
If a manager already runs the company and your pay is a real market salary, the conversation is more often EBITDA. We will tell you which one applies. We will not hand you a multiple and call it precise.
What changes the range after earnings
The earnings number is not the whole price. Buyers also look at customer concentration, how much the business depends on you, whether the books are clean, the condition of equipment, and whether someone else can run it. Any of those can move a starting range up or down.
A range is not an asking price
The calculator is a directional SDE range. It is not an appraisal, and it is not the price a buyer will pay. Asking price comes after the books, the add-backs, and a conversation about timing.
Next step
Use the free valuation calculator for a starting range, or call 615-240-5235 for a confidential review.
