What Your Trade Is Really Worth (and the Independence Discount Behind the Number)

The short version

• An owner-dependent service business transacts near 1.65x SDE; an owner-light one near 3.5x. On a $300,000-SDE business, that spread is $555,000.
• The 7-15x quoted for your trade is an EBITDA multiple for a PE platform roll-up, not the SDE number a $500K-$2M owner-operator sells at.
• 86% of small business owners have no professional valuation or only a rough estimate, so most are anchored to the wrong number.
• The gap between the two numbers is one thing, and it is the same in every trade: how much of the business still runs on you.
• Find your trade below, then your job, and start from the number a buyer will actually pay.

The number on the broker page isn't your number

You have seen a multiple quoted for your trade. HVAC owners get told 7 to 12 times; pest control owners get told 10 to 15 times.

So you have quietly been running that math on a one-to-five-truck business. On $1.4M of revenue and $320K of owner earnings, the number in your head is well north of $2M.

That math is wrong, and the reason it is wrong is the same in every trade. The business still runs on you, and the quoted multiple was never built for a business that runs on one person.

There are two different worlds hiding inside one number. One is a private-equity platform priced on EBITDA, and the other is the owner-operator priced on SDE.

This hub separates those two worlds and names the gap between them. Then it sends you to your specific trade, where the real numbers live.

The real Main Street number is an SDE multiple, not an EBITDA multiple

A $500K-$2M owner-operated trade business is worth a low-single-digit multiple of its seller's discretionary earnings, not the 7 to 15 times you have seen quoted. That quoted figure is an EBITDA multiple for a private-equity platform roll-up, which strips out the owner's pay and assumes a management layer is already in place.

SDE adds the owner's pay back in, because a buyer of your business has to replace you. That single accounting difference is most of why the two numbers split.

EBITDA describes a company that already runs without any one owner. SDE describes a company that still runs on the owner writing the checks and quoting the work.

The same business looks like 9 times to a broker and roughly 3 times to the person actually buying it. Both numbers are real; only one of them is yours.

Run it on $320K of owner earnings. At a low-single-digit SDE multiple that is roughly $700K to $1M, not the $2M-plus the 7-to-15 framing implied.

The clean way to see the conversion, line by line, is the method a buyer uses on your numbers.

That walkthrough is how to value a small business the way a buyer will, and it shows exactly where the platform number and your number split apart.

Why the gap between the two numbers is you

The distance between the low Main Street number and a stronger one is not your trade or your revenue. It is owner-independence, and it is measurable in dollars.

An owner-dependent service business transacts near 1.65x SDE. An owner-light one transacts near 3.5x.

On a $300,000-SDE business, that spread is $555,000. Same revenue, same trade, same year, set entirely by how much of the business still runs on you.

A buyer is not paying for last year's earnings. They are paying for the probability those earnings survive your departure.

That is also the second reason the platform multiple is higher, and it is the one that matters to you. The roll-up already runs without any one owner, so its management risk is solved; you are selling a company where that risk is the first thing a buyer has to solve after closing.

So the SDE-versus-EBITDA gap is not only accounting. It is a direct readout of how much of the business still sits on the owner.

Most owners cannot see that number, because 86% of small business owners have no professional valuation or only a rough estimate. They are anchored to the broker's headline and never see the discount underneath it.

The dollar-priced version of that gap is one idea, and it sets your multiple.

It is the independence discount that sets your multiple, the same value driver the rest of the site runs on.

The outcome on the other side of closing that discount is a specific operating state, not a slogan.

It is a business that runs without you, running on documented systems and named owners rather than on your attention.

Find your trade, then your job

The discount is real in every trade, but the single most expensive thing tying value to the owner is different in each one. Start with your trade below, where the real numbers and the #1 driver live.

• HVAC. The most expensive owner-dependence is the maintenance-agreement book plus the replacement quoting you do in your head. See what an HVAC business is really worth for the SDE number and the decisions that move it.

• Electrical. Here the value bottleneck is master-license dependence, where the business cannot pull permits or pass inspection without one person. See what an electrical contracting business is worth for how a buyer prices that single point of failure.

• Plumbing. The driver is emergency-dispatch dependence, where the owner is still the one routing and triaging the after-hours calls that carry the margin. See what a plumbing business is worth for what makes that dispatch transferable.

• Pest Control. The number turns on route density and recurring-contract retention, the recurring book that a buyer pays the higher multiple for when it holds. See what a pest control business is worth for how density and retention set the band.

• Remodeling. This one sells differently, because it is project-based and low-recurring, so the driver is the owner acting as estimator and project manager with no recurring book to sell. See what a remodeling business is worth (and why it sells differently) for the exception and how a buyer reads it.

Each trade hub carries the real per-trade numbers a working owner closes at. This hub carries the frame that those numbers are SDE, not EBITDA, and that the discount is yours to close.

How each trade fans out, by job, after you pick your trade

Pick your trade first; then pick the job you are actually trying to do. Each trade hub fans out to five jobs, so you enter by trade and self-select from there.

• Sell the business for more than the owner-dependence discount.
• Value it the way a buyer will, in SDE not EBITDA.
• Improve it so it runs without you, which is the same work that lifts the multiple.
• Hire the manager who holds the standard you hold today.
• Buy a business in the trade, using these same levers in reverse to set an offer.

The trade hub carries the real numbers; the horizontal posts carry the method. You read your trade for what your number is, and the method posts for how to move it.

Find your real number, then close the discount

The discount is owner-controlled and rankable, which means your real number is knowable today, not on the day a broker shows up. The only open question is where this specific business sits on the 1.65x-to-3.5x spread.

That is what the free Keystone diagnostic measures. It scores how much of the business still runs on you and returns an estimated sale price, calibrated against 10 years of BizBuySell Insight Reports and 1.6M+ SBA 7(a) loan records.

Get your three scores and an estimated sale price, free, at app.trykeystone.io. It is four minutes, and it tells you what the discount is costing you before you pick a trade hub to work.

If you are not ready to run it, the newsletter covers the exit math and operating mechanics that move the number, one issue at a time.

FAQ

What multiple do trade and service businesses sell for?

An owner-operated trade business in the $500K-$2M range sells at a low-single-digit multiple of seller's discretionary earnings, set by owner-independence and the strength of any recurring book. The 7 to 15 times you may have seen quoted is an EBITDA multiple for platform roll-ups, not the owner-operator's number.

Why is the multiple I saw quoted so much higher than what I'm told my business is worth?

The quoted figure prices a private-equity platform on EBITDA, which assumes a management layer is already in place and strips out the owner's pay. Your business is priced on SDE, which adds your pay back in because a buyer has to replace you, so the same business reads as a much lower multiple.

What's the difference between an SDE multiple and an EBITDA multiple?

SDE includes the owner's compensation and add-backs and is how a $500K-$2M owner-operated business is priced. EBITDA strips the owner's pay out and assumes a management team is already running the company, which is why platform roll-ups trade at far higher multiples than a one-to-five-truck owner ever will.

What makes a trade business worth more?

The business running without the owner: documented work, a named manager who holds the standard, and customer relationships that belong to the company. Owner-light service businesses transact near 3.5x SDE and owner-dependent ones near 1.65x, a $555,000 spread on a $300,000-SDE business.