Core Growth Group has released a guide explaining how different buyers calculate business earnings and what those differences could mean for HVAC and plumbing owners preparing to sell their companies.
-- Core Growth Group has released a business sale valuation guide with a calculator to help HVAC and plumbing business owners understand the differences between adjusted EBITDA and seller's discretionary earnings (SDE). The resource explains how each metric is calculated, when buyers use it, and why choosing the appropriate measure matters when preparing a business for sale.
More information is available at https://coregrowthgroup.com/adjusted-ebitda-vs-sde-differences-calculator-use-cases
The guide comes as many business owners remain uncertain about their company's value. According to BizBuySell's 2025 Insight Report, only 14% of surveyed owners had completed a professional business valuation, while 35% admitted they had no idea what their business was worth. These findings demonstrate the importance of understanding how earnings are calculated and assessed before entering sale negotiations.
SDE generally applies to smaller, owner-operated businesses where the buyer expects to assume the seller's responsibilities. It adds back the owner's compensation and certain discretionary expenses to estimate the financial benefit available to a working owner.
Adjusted EBITDA, meanwhile, is commonly used to assess businesses operating with professional management. It accounts for the cost of replacing an owner's operational responsibilities, providing a measure of earnings that may be more relevant to institutional or strategic buyers.
“One of the biggest mistakes business owners can make is assuming that every buyer will value their company using the same earnings figure,” said Clint Evans, founder of Core Growth Group. “Understanding the difference between SDE and adjusted EBITDA helps owners see their business from a buyer's perspective, support their financial claims, and enter sale discussions with more realistic expectations.”
The guide also examines legitimate financial add-backs, including certain nonrecurring expenses, and explains why buyers may request supporting documentation before accepting adjustments. It emphasizes that the appropriate valuation metric depends on how the company operates and the buyer's intended involvement.
The guide also connects to Core Growth Group's established Grow, Prepare, Exit framework, particularly the Prepare stage, which focuses on strengthening a company's financial and operational readiness before a sale. Understanding SDE and adjusted EBITDA can help HVAC and plumbing owners identify valuation considerations early and better prepare for discussions with prospective buyers.
Business owners can learn more by visiting https://coregrowthgroup.com/
Contact Info:
Name: Clint Evans
Email: Send Email
Organization: Core Growth Group
Address: 2205 Warehouse Circle, Marble Falls, TX 78654, United States
Website: https://coregrowthgroup.com/
Source: NewsNetwork
Release ID: 89208236
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