Your earnings
Net income before taxes, for your most recent full year.
Varies by industry and size. A broker can give you a range.
Your add-backs, and how well you can prove them
Pay that was deducted as an expense, like W-2 salary or guaranteed payments, plus your health insurance and retirement contributions if the business deducted them. Leave out draws and distributions. They're already in your profit.
From your tax return. Usually the easiest to verify.
A legal bill, a major repair, a move. Things that won't happen again.
Legitimate business costs tied to you that a new owner may not carry, like the business share of your vehicle. These get the hardest look, and lenders count them only with solid written support.
Work a buyer would have to replace
A second full-time role you cover beyond running the business, or family working for little or no pay. Use a yearly market wage.
Price at risk without proof
$0
Nothing you enter is saved or sent anywhere. This is a planning tool, not tax or valuation advice. It assumes a buyer accepts all of a documented add-back, half of one with some proof, and none of one with no proof, and applies one multiple to all earnings. Real buyers and lenders judge each item on its own.
Get the add-back log
Buyers accept the add-backs you can prove. Our free add-back log is a Google Sheet you keep for yourself: one row per item the day it happens, the proof beside it, and totals by year for the years a buyer or lender will check.
Check your inbox.
The add-back log is on its way. If it isn't there soon, check your spam folder.
About add-backs
Do my write-offs lower my sale price?
Not when a buyer can see through them. Buyers price on adjusted earnings, not the profit line on your tax return. Real business costs stay costs because a new owner pays them too, and most other deductions are added back before the multiple is applied. What costs you is add-backs a buyer or lender can't verify.
What counts as an add-back?
Your own pay and benefits (all of it when a buyer uses seller's discretionary earnings, or the part above what a manager would cost on larger deals), your health insurance and retirement contributions, depreciation, interest, and one-time costs like a legal bill or major repair. Personal spending that isn't a legitimate business expense is often discounted or rejected, and it's a tax problem either way.
What proof does a buyer want?
Each add-back should tie to your books, a bank or card statement, and an invoice or receipt, and the totals should match your tax returns. A log written when each item happened holds up far better than a list rebuilt the month you go to market.
Do lenders count add-backs?
Usually the ones they can verify, like owner pay, depreciation, interest and documented one-time costs. Lenders generally test the loan against your last year or two of tax returns plus those add-backs, and make sure the business can also pay the new owner a living salary. Many buyers need a loan, so what the lender accepts often sets what a buyer can pay.
What about the work I do myself, and how much the business depends on me?
Seller's discretionary earnings assumes the buyer takes over your job. If you also cover a second full-time role, or family works for little or no pay, a buyer will usually subtract what it would cost to hire for that work. Owner dependence works on the multiple instead: when customers, know-how or licenses run through you, buyers tend to pay less or tie part of the price to results after you leave.
What multiple should I use?
It varies with your industry, size, and how much the business depends on you. Many smaller Main Street businesses sell at a low single-digit multiple of seller's discretionary earnings. A broker or advisor who knows your industry can give you a realistic range.