Whether you’re thinking of selling, buying or just want to know where you stand, get a rough value for your trades business from its adjusted earnings, assets and debt.
A business that runs on systems is worth more than one that runs on you. traqR puts your jobs, quoting and invoicing on rails a buyer can take over.
Start free trialStart with net profit, then add back the owner’s wage and any personal or one-off costs. This “seller’s discretionary earnings” (SDE) is what the business truly generates for its owner.
Multiply SDE by an industry multiple — usually 1.5×–3× for small trades. The multiple reflects risk: recurring work, a strong team and low owner-dependence push it up.
Add the value of plant, equipment and stock included in the sale, then subtract debt the buyer would take on or clear, to land on an estimated price.
Most are valued on a multiple of adjusted earnings (SDE) — net profit with the owner’s wage and one-off or personal expenses added back. That figure is multiplied by a number reflecting how risky and transferable the business is, then adjusted for the assets and debt included in the deal. It’s a rule-of-thumb approach, not a formal valuation.
For owner-operated trades businesses, roughly 1.5×–3× SDE is common. Lower if the business depends heavily on the owner, has lumpy one-off work or a few big customers; higher if it has a strong team, recurring maintenance contracts, systems and a brand that runs without the owner day to day.
Seller’s Discretionary Earnings — the total financial benefit a single owner-operator gets from the business in a year. It’s net profit plus the owner’s salary, plus add-backs like personal vehicle use or one-off costs. Using SDE lets buyers compare businesses on a like-for-like basis regardless of how each owner paid themselves.
Anything that reduces risk and owner-dependence: recurring or contracted work, a capable team and leaders, documented systems and processes, a diversified customer base, clean financials, and tools like job-management software that make the operation transferable. The less the business needs you personally, the more it’s worth.
This calculator is a general guide, not a business valuation or financial advice. Real valuations depend on many factors and methods (SDE, EBITDA multiples, asset and market approaches) and the price a buyer will actually pay. Engage a qualified business valuer or broker before buying or selling.
A business that runs on systems is worth more than one that runs on you. traqR puts your operation on rails a buyer can take over. Try it free for 14 days.