Glossary · Reading the business
In short
This is the salary, perks, and benefits the current owner takes from the business. It's a critical component in calculating the true earnings available to a new owner.
When analyzing a business, you'll often see owner compensation added back to adjust for a new owner's salary. This adjustment helps determine the Seller's Discretionary Earnings (SDE), which is a common metric for valuing small businesses. Understand what's included to assess your potential income.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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