Weekly Call Preview: SDE – A Key To Valuation

Team Acquira
-  September 28, 2023
What You’ll Learn
  • Why SDE is so important in business valuation.
  • Which add-backs should be included in an SDE calculation.
  • Important questions to ask when appraising a business.
  • An essential aspect of Acquira's training is the weekly call. Each week, Acquisition Entrepreneurs from across the country (members of the Accelerator Program) join a call to hear from special guests or Acquira's team of acquisition experts on various topics.

    The calls offer our members a chance to interface and interact with fellow Acquisition Entrepreneurs and often provide supplemental content to Acquira's existing training.

    In the most recent weekly call, Acquira Success Coach Rich Coppage walked participants through Seller's Discretionary Earnings (SDE). As Rich said, SDE is an important tool for determining whether certain earnings are legitimate. What should be added back? What shouldn't be? 

    “We're starting to have many of those questions around potential acquisitions and deals that [our partners] are looking at,” Rich said. “And I seem to get questions about it every day.”

    We wanted to share an example of one of our weekly calls with you, and this was the perfect opportunity. 

    In this video, Rich walks our partners through SDE, its key components, and how to calculate it.


    Of course, these weekly calls are only available to members of our Accelerator Program. Space in the Accelerator is limited. Fill out the form below to speak with an Acquira Admissions Representative and see if you're eligible.

    Key Takeaways

    • A company's tax structure can greatly affect its ultimate profitability.
    • The owner's daily tasks will reveal what steps are necessary to replace them upon the sale of the business.
    • SDE ignores your working capital needs by not accounting for the working capital injections that may be required by you as the buyer, especially in the case of a rapidly growing business.
    • Always base SDE projections on more than one year.
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