PROFIT ANSWER · 26 BUSINESS TYPES
How much is a business worth with $1 million profit?
If $1 million is normalized seller’s discretionary earnings (SDE), the 26 reported U.S. business-type averages imply $1,740,000 to $4,870,000, with a $2,660,000 median indication.
FIRST: DEFINE “PROFIT”
Net profit is not automatically the number buyers multiply.
For an owner-operated business, buyers commonly use seller’s discretionary earnings: reported profit reconciled for one owner’s compensation and benefits, financing and non-cash expenses, and supportable one-time or non-operating items.
SAME SDE · DIFFERENT BUSINESS TYPES
The industry spread at $1M SDE.
These are category-level indications created by holding SDE constant and changing only the reported average cash-flow multiple.
Nail salons
1.74× average cash-flow multiple
Middle of the comparison
Not an industry-wide recommended multiple
Car washes
4.87× average cash-flow multiple
ALL 26 PUBLIC COMPARISONS
What $1 million of SDE maps to by business type.
Sorted by implied value. Open a business type for its sale price, revenue, cash flow, multiple, and transaction-count context.
Calculation: $1,000,000 SDE × each business type’s reported average earnings multiple. Values are rounded to the nearest dollar.
WHAT CHANGES HERE
At $1M, first decide whether the earnings are really SDE or EBITDA.
SDE normally includes one owner’s compensation and benefits. Larger, management-run companies are more often discussed using adjusted EBITDA, which retains market-rate management expense. That definition can change both the earnings number and which buyer-market multiples are relevant.
TURN THE COMPARISON INTO YOUR VALUATION
Three checks before treating a benchmark as yours.
Normalize the earnings
Reconcile profit into supportable SDE. Separate recurring operations from personal, one-time, financing, and non-cash items.
Calculate SDEChoose the right market
SDE is most useful for owner-operated businesses. Management-run lower-middle-market companies are usually compared using adjusted EBITDA.
Compare company sizesApply company evidence
Use your actual growth, recurrence, customer mix, owner role, geography, and systems to move beyond a category average.
Start privatelyCOMPARE THE PROFIT LADDER
What another SDE amount maps to.
SOURCE CONTRACT
Public category averages. No private transaction exposed.
The Q3 2021–Q2 2026 average cash-flow multiples come from BizBuySell’s published industry benchmark table. We multiply each reported category average by the same SDE amount and keep the categories separate. This page does not publish any individual transaction, proprietary comparable, or contributor record.
COMMON QUESTIONS
$1M profit valuation, without the shortcut.
How much is a business worth with $1 million in annual profit?
If $1 million is normalized seller’s discretionary earnings (SDE), the 26 reported U.S. business-type averages imply $1,740,000 to $4,870,000, with a $2,660,000 median indication. That comparison applies only when “profit” has been normalized into SDE. It is not a company-specific appraisal or a prediction of sale proceeds.
Is net profit the same as SDE?
Usually not. SDE starts with reported profit, then may add back one owner’s compensation and benefits, interest, taxes, depreciation, amortization, and supportable one-time or non-operating expenses. Unsupported add-backs should not be included.
Why does the business type change the value so much?
Buyers pay different average multiples across industries because transferability, recurring revenue, equipment needs, regulation, customer concentration, growth, and owner dependence vary. The table holds SDE constant so that the reported industry multiple is the only changing input.
Is this the amount the seller takes home?
No. These are market indications before company-specific adjustments. Debt, cash, working capital, fees, taxes, seller financing, earnouts, and deal terms affect seller proceeds.