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A/R Aging Report Guide1031 Exchange GuideLOC GuideSBA 7(a) GuideSBA 504 GuideSection 179 GuideSelling a Business
Setting an Asking PriceUsing a Business BrokerSelling a Business During DivorceSelling a Failing BusinessTransferring Intellectual PropertyPreparing an Online Business for SalePreparing for Sale, Two Years OutSelling a Business QuicklyWriting a Selling MemorandumSelling a Business Step by StepSelling a Business With DebtChanges Worth Making Before SellingMost independent restaurants earn what they earn because the owner is expediting and watching the pass. A buyer cannot assume that.
The same restaurant is worth $659,190 owner-run and $1,163,800 with a manager in place. The gap is what the buyer has to pay someone.
Read from the calculator on its shipped example. Lines marked (derived) are the difference between two of its figures rather than one it displays directly.
Every figure above is computed from inputs you control. Change one and the whole model moves.
Prime cost is 61% against the 65% line a lender uses. The two costs a buyer can change.
These charts are the calculator’s own, drawn from the example it ships with. Put your figures in and they redraw.
Quoting SDE against an EBITDA multiple, or the reverse. They differ by exactly the manager's cost, and mixing them moves the answer by more than half a million on a business this size. Beyond that: reading one good year as a trend, when the five-year view tests whether a margin gain came from the kitchen or from somewhere a buyer cannot repeat.
Rules of thumb that circulate because they are roughly right. The calculator labels them as such and asks you to record your own source.
The tool applies all of this to your numbers, and tells you where it disagrees with itself.
On earnings, and which earnings figure matters enormously. The worked example is worth $659,190 owner-run and $1,163,800 with a manager in place, and the gap is what a buyer has to pay someone.
Sixty-five percent is the line lenders and buyers commonly use. The worked example runs 61%, and prime cost is the only pair of costs a buyer will credit you for improving.
Whichever matches the multiple you are applying. They differ by exactly the manager's cost, and mixing them moves the answer by more than half a million on a business this size.
It is a genuine asset — you are paid at the table and pay suppliers in thirty days, so the cycle funds itself. It also reverses the moment volume drops, which is why the tool models both sides.
The answers above use the worked example. Your practice will give different ones.
Restaurants fund on equipment and fit-out more than on goodwill, and the working-capital cycle runs backwards — which helps at close and hurts when volume drops.
The standard acquisition route. Ten years against earnings that assume a salaried manager, not the owner working the pass.
Bank debt, seller note and equity against coverage. The worked example clears at 2.16×, which is unusually comfortable for this sector.
Line equipment, refrigeration and POS. Useful life is shorter here than in most sectors, so term matters more than rate.
If the building transfers. Fixed long-term money, and it will not fund the fit-out or the opening inventory.
Standby paper bridges the gap between the price an owner-operator earns and the price a managed business supports.
Every 20% owner files one. Lenders in this sector look hard at operating experience alongside the numbers.
SDE and EBITDA differ by exactly what a manager costs, and that gap is most of the price. Settle which basis you are quoting before anyone asks.
No credit card required now. As long as your details are in the system, we send the discount access details when the software opens.
And the financing calculators are free and working today. SBA 7(a), 504, CAPLines, Form 413, equipment and seller paper — your account opens all of them the moment you register, months before the valuation software ships.
The whole analysis exports as one PDF, generated server-side — every tab, the five-year history, the normalization and the working behind each figure. Not a screenshot of the tab you happen to be on.
It carries the business name, the period, who prepared it and for whom, so a lender or a buyer can act on it without asking who produced the figures.
One email when the software opens, and nothing else. Your details are not sold or passed on.
Figures are the calculator’s worked example, read from the tool itself. Thresholds described as conventions are not market observations. Saving is optional and off by default; saved work is encrypted at rest with AES-256. This tool produces estimates on figures you enter, not a valuation, appraisal, or legal, tax or accounting advice. ExitAdviser is operated by Simplifying Calculation LLC, a Delaware limited liability company.