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How do you figure out what your business is really worth? Many business owners assume there's a simple formula—but the reality is that business valuation is one of the most misunderstood parts of selling a company.
In this episode, I break down the valuation framework I've used for nearly 50 years as a business broker to help owners price their businesses with confidence.
You'll learn the difference between **EBITDA** and **Seller's Discretionary Earnings (SDE)**, why most small businesses sell based on SDE instead of EBITDA, how earnings multiples really work, and when inventory and real estate should (and shouldn't) be added to your valuation.
I also explain why buyers are purchasing your future—not your past—and why understanding that mindset can dramatically improve your asking price and negotiation strategy.
Whether you're planning to sell your business next year or simply want to understand what it's worth today, this episode will give you a practical foundation that every business owner should know.
**In this episode, you'll discover:**
* The difference between EBITDA and Seller's Discretionary Earnings (SDE)
* Why most small businesses sell for 2–4× earnings
* How to calculate a realistic asking price
* When inventory and real estate add value—and when they don't
* Why future earnings matter more than historical financials
* The four principles that drive small business valuation
If you're serious about maximizing the value of your business before you sell, this episode is the perfect place to start.
**Subscribe** for more practical strategies on buying, selling, valuing, and growing small businesses from nearly five decades of experience in business brokerage.