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Benchmarking Seller's Discretionary Earnings in a Small Business: Based on data from Pratt's Stats (PDF)
Business Valuation Resources, LLC
Seller's discretionary earnings is an integral figure in small-businesses transaction data. For a business appraiser, it represents an important financial metric for valuation. For a business intermediary, it is a crucial figure used to price and list a business for sale. For the owner-operator of a small business, it represents a measure of earnings - a figure that can serve as a benchmark indicator for other companies in the same industry.
This special report reveals what small business owners are achieving in seller's discretionary earnings by sector and company size with benchmarking from 21 industry groupings including real estate, personal services, restaurants, construction and more. We used Pratt's Stats, a database with thousands of business transactions to analyze seller's discretionary earnings in sold private businesses with metrics including discretionary earnings to revenue, selling price to discretionary earnings, and profit margins.